Should Royal Mail be privatised?

This lunchtime, I attended a seminar organised by the Social Market Foundation at which three different models were proposed for the creation of shares in Royal Mail which is currently 100% owned by the Government.
Model 1: This was put forward by Conservative MP Tom Yeo, former Shadow spokeperson for Trade & Industry. He wants Royal Mail to be totally privatised. One quarter of shares would be given free of charge to something he calls The Post Office Community Trust which would use the income from these shares to help vulnerable branch post offices. One quarter would be given free of charge to the trustees of the Post Office Pension Plan who would be free to sell their shares and use the proceeds to cut the deficit in the Plan. One quarter would be given to the workforce under an employee participation scheme that would give every employee a shareholding based on length of service. One quarter would be sold to investors and the proceeds invested in the business. For good measure, the 500 or so branch post offices currently run by Post Office Ltd would – under his plan – all be franchised.
Model 2: This was put forward by Liberal Democrat MP Norman Lamb, former Shadow spokeperson for Trade & Industry. He would take Post Office Ltd (that is, all the main post offices) out of the Royal Mail Group and keep it in public ownership. Then 51% of the shares in Royal Mail would be divided equally between the Government and a trust for staff based on the John Lewis Partnership model. The other 49% would be sold equally to staff who wanted to buy extra shares and small investors and to the equity market. The proceeds from this 49% would not go to the Government but to fund the Post Office network.
Model 3: This is the proposal put to Government by Allan Leighton, Chairman of the Royal Mail Group. He wants 20% of Royal Mail to be made available to staff. It is claimed that this move would motivate staff to identify more closely with the company and raise producctivity within it. It is said that this would not be privatisation and would not be a precursor to the flotation of the company.
Personally I am politically very uncomfortable with privatisation of such a national asset and social service, I am cynical about the motives for privatisation, and I am very doubtful as to the effect on the movitivation of the staff without other profound culture changes from the top leadership of Royal Mai which currently they show little sign of endorsing.

This entry was posted on Tuesday, July 11th, 2006 at 8:37 pm and is filed under British current affairs. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

One Comment

  • Mavis
    July 18th, 2006 at 11:45 pm

    The short answer is ‘NO’.
    Just look at the mess, with water, rail and other utilities which were privatised. And the biggest blunder, selling Council Housing.
    People need a roof over their heads, water, gas, electricity, travel within the UK, an education, a basic access to communication and a Health service.
    After those basic needs are provided by the collective (taxes) then market forces should be allowed to with the rest.