Buy it Now: Royal Mail for sale. Item ends in six weeks
According to reports on Wednesday’s BBC Newsnight, Royal Mail is up for sale as of 07:00am on Thursday.
Expected to be valued at up to three billion pounds, the exact price and details of how the sale will work will become clear soon. Much of the small print has been a mystery hitherto but we do know 10% will be made available to staff.
Privatisation has been coming for some time, price changes (especially increased parcel prices) earlier in the year were one thing the Royal Mail did to make it a more attractive purchase to investors. A debt deal today was also part of that.
There has also been speculation that chunks of the stock could be snapped up by an overseas postal firm such as the German Postal service Deutsche Post.
The TUC (Trades Union Congress) currently meeting in Bournemouth is against the sale and the CWU (Communications Workers’ Union), which is in the process of balloting members who work at Royal Mail on strike action, is bullish and predicts industrial action. CWU deputy general secretary, Dave Ward said on Wednesday: “We have not gone through all of that pain to save the industry only to hand it over to private investors who will take more money out than they will ever put in.” Trades Unionists also issued a challenge to Labour to commit to renationalisation if the party takes power after the 2015 general election.
So, the bad news is that a Royal Mail strike is probably on the way in October. That’s not good for small business ecommerce sellers and it’s well worth planning now to mitigate the problems that are likely to occur.
As for privatisation, we at Tamebay still think the same. Privatisation in itself doesn’t solve the many problems that Royal Mail has. Access to private capital, freedom to innovate and focus better on customer needs is vital and the Government can provide that without flogging off a vital public service. On a personal note, as I consider my gas bill or deal with BT, I don’t feel the promise of privatisation delivers on price or service in the long run.