A Royal Mail post box.— PHOTO: Reuters
The British government is pressing ahead with its
controversial plans to privatise Royal Mail, a decision described by
the Financial Times as the “most ambitious privatisation since John Major sold the railways in the 1990’s.”
Royal Mail is an iconic institution, dating back to 1512 under Henry
VIII’s reign, and its privatisation is being met with stiff resistance
from labour unions.
Business Secretary Vince Cable announced the plans to the Cabinet on
Tuesday. It will entail a stock market flotation of the company, a
process which will take four to six weeks that according to industry
watchers could value the company at up to 3 billion GBP.
The announcement comes at a time when the 125,000 postal workers are
being balloted for a strike, the results of which will be announced on
October 3.
In a statement, the Communications Workers Union said the plans to
sell are a “betrayal of the British public — 70 per cent of whom are
against privatisation according to a Sunday Times poll at the weekend.”
In a letter to a postal employee on the government website, Michael
Fallon, the Minister for Business and Enterprise, had justified the sale
on the grounds that it would give Royal Mail “future access to private
capital” to “modernise and take advantage of opportunities to grow.” It
should not have to compete with hospitals and schools for “scarce public
resources,” he said.
Mr. Fallon has promised the continuation of existing delivery
patterns, and 10 per cent shares of the company for postal employees,
though he made no commitment on whether these shares would be discounted
or given free.
Bill Hayes, the CWU General Secretary, calls the government argument “dogma from old-fashioned Tories wedded to privatization.”
In a statement on CWU’s website, he argues that privatization is the
“worst way to access capital as it’s more expensive than borrowing under
public ownership” pointing to Network Rail, the public utility that
owns and operates Britain’s network infrastructure, which “borrowed
billions on private markets at cheaper rates under an arrangement which
doesn't affect public debt.”
Source The Hindu 13.09.2013
