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Royal Mail privatisation – what’s your view?

Royal Mail privatisation – what’s your view?

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The government has given formal notice to the London Stock Exchange that it plans to privatise the Royal Mail in the coming weeks.

The sale of the business, which is worth around £3bn, is expected to take place in November.

Business secretary Vince Cable said: "HM Government is taking action to secure a healthy future for the company."

However the Communication Workers Union (CWU) opposes the float and is expected to vote for industrial action - the first date available for a strike is 10 October.

What do you think of the plan?

How will it affect your business, practice and clients?

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12th Sep 2013 13:04

Only re-douible my efforts

In my case it will only cause me to re-double my already considerable efforts not to post anything! Hope it works out for them!! I am sure that the planned industrial action will encourage potential investors!

Captain

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By mhtax
12th Sep 2013 13:45

Competition better?

According to chats with our postmen when mail is sent via third party companies, such as TNT, it is passed on to post office to deliver at no extra charge. Presumably once privatised this will no longer be the case so competitors service will be dearer

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12th Sep 2013 14:10

I don't trust private companies ...

...to put customer service before profits/shareholders. Those of us who live in hard to reach places will be saying bye bye to a regular postal service. That is what happened when they privatised the buses, despite promises to the contrary.

I don't agree with privatising essential services as they have us over a barrel and the OFCOMS and Energywatches of this country do sod all. I particularly dislike foreign companies being allowed to buy & control our essential services.

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By Old Greying Accountant
12th Sep 2013 15:34

Agree with Shirley ...

... there should at least be a referendum before selling any national utility/service as we all own it jointly, the governement hold it in trust and should not have the right to dispose of without asking the people first.

Failing that, every UK resident should be given one share, and any one who wants it would have to buy them up one at a time!

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By JC
12th Sep 2013 14:51

Real issue - dumping the underfunded pension ...

on the state so that a prospective purchaser would not get lumbered with pension liabilities

So give them to the tax payer - then give the work force £xK as a 'thank you' ?, incentive for the future or whatever

Raising issues about selling at this stage has rather missed the boat. GO should not have been allowed to grab the £30bn PO pension fund in the first place.

And what happened to this PO pension fund - did it go into a sinking fund for future pensions (the prudent approach) or was it included as part of the main coffers to be spent at will, leaving the taxpayer with a future liability over and above the original one?

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12th Sep 2013 15:24

Struggling to think

I am struggling to think of any privatisation where the outcomes have been those we were promised.

When the going gets tough private companies seem to walk away from their responsibilities or fleece the customer.

Apparently some train journeys are timetabled to take longer than they did 40 years ago so that less compensation will be paid out for them being late.

 

 

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12th Sep 2013 16:19
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By jndavs
12th Sep 2013 17:01

So long

I expect Royal Mail will become a wholly owned subsidiary of Deutsche Bundespost or La Poste  within a year or two. Have we any more assets left to strip?

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13th Sep 2013 17:13

I agree with Bob Crowe...

....this sort of privatisation can only lead to higher costs and reduced services for customers. It is time that the railways were re-nationalised too.

And while we're at it, the water companies as well.I see no evidence that any of these privatisations of monopolies have benefited consumers.

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19th Sep 2013 11:56

So they're selling us something we already own...

Royal Mail used to be a public service, now it's a business trying to make a profit by whatever means possible.  This year's healthy profits were made on the back of prices which have been virtually doubled for parcels & international post - I doubt that'll be sustainable in future, although I'm sure they'll find ways to give dividends to the shareholders.

It's a bit of a shame there's been no public consultation; I've seen two surveys of small businesses which show strong disapproval of the move.

I wonder how long it'll be before Royal Mail domiciles itself in Luxembourg to avoid Corporation Tax ?

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to stepurhan
19th Sep 2013 12:06

Relax

Alonicus wrote:

So they're selling us something we already own...

And we get the huge windfall from the sale. It's just that the Treasury will act as custodians to ensure the funds are used well. Does that make you feel better? 
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to Derek Cousens
19th Sep 2013 12:20

Windfall

There is no windfall pension liabilities we've taken on will negate any sale proceeds. Then we pay more for a reduced service.

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By Flash Gordon
to stepurhan
19th Sep 2013 14:54

Luxembourg

Alonicus wrote:

I wonder how long it'll be before Royal Mail domiciles itself in Luxembourg to avoid Corporation Tax ?

Given the time it sometimes takes them to deliver now I reckon that's where they have half of their sorting offices!

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19th Sep 2013 12:18

Agree with everyone above

Privatisation of essential services only leads to increased cost and worse services for the consumer.

All businesses want to be able to charge as much as possible and keep costs as low as possible. OK within a competitive market but when when a business has monopoly power it's disaster for consumers. I agree with Shirley M, they do put the regulators over a barrel and it's worrying that many of these companies are in foreign hands.

I also agree with Old Greying, we should have a referendum before they're allowed to sell our assets to flatter their economic record and please the lobbies. Or the share per person..

 

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19th Sep 2013 12:26

Agreed

But we would have had the pension liabilities anyway. I can not argue with your second point.

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to galileo51
19th Sep 2013 12:35

Pension

But if they hadn't wanted to sell it the pension could have stayed with the PO and at least be partially covered by future profits.

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19th Sep 2013 12:49

Spot on, fionamcke ! 

Spot on, fionamcke ! 

Royal Mail are an effective monopoly unless you are sending tens of thousands of items a year (TNT won't even speak to you untill you are sending 100+ a day, every day).

I posed a question to Damian Collins MP, recently appointed Conservative small business champion for the South East, about Royal Mail.  His response (sans politician fluff) was that if you don't like them, use a competitor.  I've subsequently written asking him to tell me a competitor willing to handle letters and small packets rather than parcels.  I haven't heard back yet....

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19th Sep 2013 15:21

VAT

And presumably going forward VAT will have to be added to their charges....

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to John Charman
19th Sep 2013 16:18

yes, but

Will it be worth buying the shares? I've read that they will be starting on a 6% yield.

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20th Sep 2013 12:20

Royal Mail and VAT

@colinhigginson

Royal Mail already charge their business customers VAT and fuel surcharge for everything except the most basic letters.  I think they also charge the public VAT for some value-added services, but I'd have to check to be sure.

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to Pygmy
20th Sep 2013 14:46

VAT & Royal Mail

Alonicus wrote:

@colinhigginson

Royal Mail already charge their business customers VAT and fuel surcharge for everything except the most basic letters.  I think they also charge the public VAT for some value-added services, but I'd have to check to be sure.

Yes on some they do - I was referring to the currently exempt services, the most basic letter being the most relevant for 99% of the population.
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