Royal Mail privatisation begins today with flotation

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  • rusty123rusty123 Posts: 22,872
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    jmclaugh wrote: »
    I'd hardly call Royal Mail the family silver

    Me neither. Sentiment is not a sound basis for a business model.
  • PrestonAlPrestonAl Posts: 10,342
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    About time. Hopefully this will open up the entire delivery spectrum to. We need competition at all levels for the doorstep delivery.

    Another nail in the coffin for Unions. That's always a positive.
  • rusty123rusty123 Posts: 22,872
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    I thought RM privatisation was due to an EU directive, prohibuting state monopoly on mail delivery? The Tories are simply doing this under orders from the EU, no?

    I've no idea, but wouldn't be in the least bit surprized if that were true. An EU directive is why the TSB is being ressurected as far as I can tell so I wouldn't blindly bet against the notion.
  • mossy2103mossy2103 Posts: 84,307
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    welwynrose wrote: »
    It's not exactly brilliant at the moment - prices keep on going up and the service gets worse & worse

    And haven't those prices been rising in order to increase profitability (prior to a potential sell-off)? And look at other privatisations - did they lead to a lowering of, or stable prices? Nope, not at all, in fact in many areas the exact opposite.
  • jmclaughjmclaugh Posts: 63,988
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    tiggertiny wrote: »
    I'm not convinced regulation has done much for the average consumer apart perhaps from the telecoms business where there is genuine competition.

    Water, no choice, gas and electric a choice between expensive and very expensive, rail for most working people very expensive.

    Not a great track record in my view.

    There is quite a bit of competition in parcel delivery at least for businesses. However RM pretty much has a monopoly in the consumer market as will whoever buys it and it is in theory an easier market to regulate.

    As an aside I was talking to someone who is involved with a rural community shop that opened this year and it costs them £700 a year just to operate a postal service in the shop whereby RM will collect from them. The margin on stamps is very small so in essence they provide the service at a loss for the community but may well not continue it.
  • barky99barky99 Posts: 3,921
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    Living in an area where royal mail has zero competition this sell off concerns me, privatised utilities have been allowed an opt out for rural areas 'if they find things difficult' in recent times delaying re-connection etc & I think mail would probably go down to 2 (or 3) deliveries a week -- or collect from sorting office (35 mile round trip) if I wanted stuff sooner, am sure royal mail makes no money here & if private i'm sure they would class area as 'difficult' to deliver to so reduce service.
    xmas card delivery runs would take a bit longer with double (or more) cards per van ... maybe need bigger van(s)?
  • jmclaughjmclaugh Posts: 63,988
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    barky99 wrote: »
    Living in an area where royal mail has zero competition this sell off concerns me, privatised utilities have been allowed an opt out for rural areas 'if they find things difficult' in recent times delaying re-connection etc & I think mail would probably go down to 2 (or 3) deliveries a week -- or collect from sorting office (35 mile round trip) if I wanted stuff sooner, am sure royal mail makes no money here & if private i'm sure they would class area as 'difficult' to deliver to so reduce service.
    xmas card delivery runs would take a bit longer with double (or more) cards per van ... maybe need bigger van(s)?

    Do you have any examples of this opt out that private utilities have for rural areas? The government have said the present 6 days a week universal delivery is law so the only way it could be changed is if parliament legislate to do that.
  • CharlotteswebCharlottesweb Posts: 18,680
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    jmclaugh wrote: »
    Do you have any examples of this opt out that private utilities have for rural areas? The government have said the present 6 days a week universal delivery is law so the only way it could be changed is if parliament legislate to do that.

    They wont opt ouit of it.

    They will, however, like the railways, demand billions of tax payers money to keep doing it.

    In another world it would be blackmail, in the corporate world, its aggressive negotiation. And because we will have sold them a monopoly in those markets, the only choice will be to pay up.
  • rusty123rusty123 Posts: 22,872
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    barky99 wrote: »
    Living in an area where royal mail has zero competition this sell off concerns me, privatised utilities have been allowed an opt out for rural areas 'if they find things difficult' in recent times delaying re-connection etc & I think mail would probably go down to 2 (or 3) deliveries a week -- or collect from sorting office (35 mile round trip) if I wanted stuff sooner, am sure royal mail makes no money here & if private i'm sure they would class area as 'difficult' to deliver to so reduce service.
    xmas card delivery runs would take a bit longer with double (or more) cards per van ... maybe need bigger van(s)?

    Whoever buys it will be tied to certain legal obligations regarding service and uniform pricing.

    If service levels did drop and your rural area only received post three times a week instead of six - woud you suffer from that?
    I shop a lot online, I preorder stuff from shops for both instore and home delivery. It wouldn't bother me one jot if, in that worse case scenario, i might not receive something until Wednesday that I might previously have been able to get on a Tuesday - and I don't live in the sticks.
  • rusty123rusty123 Posts: 22,872
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    They wont opt ouit of it.

    They will, however, like the railways, demand billions of tax payers money to keep doing it.

    In another world it would be blackmail, in the corporate world, its aggressive negotiation. And because we will have sold them a monopoly in those markets, the only choice will be to pay up.

    The only choice?

    I think not.
  • jmclaughjmclaugh Posts: 63,988
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    They wont opt ouit of it.

    They will, however, like the railways, demand billions of tax payers money to keep doing it.

    In another world it would be blackmail, in the corporate world, its aggressive negotiation. And because we will have sold them a monopoly in those markets, the only choice will be to pay up.

    Perhaps but that surely depends on how it is regulated and the terms of the sale. It would be quite difficult to introduce competition in say letter delivery just because of the logistics involved, i.e it all goes in the one post box.
  • rusty123rusty123 Posts: 22,872
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    jmclaugh wrote: »
    Perhaps but that surely depends on how it is regulated and the terms of the sale. It would be quite difficult to introduce competition in say letter delivery just because of the logistics involved, i.e it all goes in the one post box.

    It seems odd that people are concerned about being held to ransom by businesses with an effective monopoly but not one word of criticism when that exact strategy is threatened by a union dinosaur like Billy Hayes.
  • smudges dadsmudges dad Posts: 36,989
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    jmclaugh wrote: »
    Do you have any examples of this opt out that private utilities have for rural areas? The government have said the present 6 days a week universal delivery is law so the only way it could be changed is if parliament legislate to do that.

    Who would trust a future Conservative government not to give in to their chums in the city and change the law?

    Living in a rural area it is bad enough getting a shit service from the privatised BT (£35/month for 500k business BB), and Royal Mail has complicated the costs so much it takes ages to measure every packet as well as weighing it, so it makes it a nightmare for a small business to set postage costs.
  • jmclaughjmclaugh Posts: 63,988
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    Who would trust a future Conservative government not to give in to their chums in the city and change the law?

    About as much as I 'd trust a future Labour government to.
    Royal Mail has complicated the costs so much it takes ages to measure every packet as well as weighing it, so it makes it a nightmare for a small business to set postage costs.

    Indeed, it makes the queues even longer, but when did RM give a fig about its customers.
  • rusty123rusty123 Posts: 22,872
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    Who would trust a future Conservative government not to give in to their chums in the city and change the law?

    Nothing like a nice bit of lefty scaremonering to liven a debate. :)

    With the 10% of shares being given to the workforce and assuming the average royal mail salary of their 150,000 strong workforce is £22,000, for every week they would be prepared to strike and earn nothing they could buy another 2% stake in the business between them.
    The government are only looking at selling just over 50% of it at this moment. A workforce who'd be prepared to strike for six weeks plus could have bought 25% of the business in that time when combined with the 10% stake they're being given.

    Come on unions - put up or shut up.
  • glasshalffullglasshalffull Posts: 22,291
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    rusty123 wrote: »
    Nothing like a nice bit of lefty scaremonering to liven a debate. :)

    With the 10% of shares being given to the workforce and assuming the average royal mail salary of their 150,000 strong workforce is £22,000, for every week they would be prepared to strike and earn nothing they could buy another 2% stake in the business between them.
    The government are only looking at selling just over 50% of it at this moment. A workforce who'd be prepared to strike for six weeks plus could have bought 25% of the business in that time when combined with the 10% stake they're being given.

    Come on unions - put up or shut up.

    That's a false rationale...what would the postal workers use to pay their bills while they are theoretically putting all their salary into buying additional shares in the Royal Mail?
  • rusty123rusty123 Posts: 22,872
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    That's a false rationale...what would the postal workers use to pay their bills while they are theoretically putting all their salary into buying additional shares in the Royal Mail?

    How would they pay the bills when they're striking for god knows how long?
  • barky99barky99 Posts: 3,921
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    jmclaugh wrote: »
    Do you have any examples of this opt out that private utilities have for rural areas? The government have said the present 6 days a week universal delivery is law so the only way it could be changed is if parliament legislate to do that.
    was disconnected with no electric for days on end last winter & couldn't get compensation as I live in a 'difficult to service area' --- obligation for a privatised royal mail is to keep existing service for 3 years -- after that it's left to 'market forces' = lots of current royal mail workers made redundant & as there is no competition here I shudder to think what will happen!
  • jmclaughjmclaugh Posts: 63,988
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    That's a false rationale...what would the postal workers use to pay their bills while they are theoretically putting all their salary into buying additional shares in the Royal Mail?

    RM's workers (167,000) will get about £2000 of free shares that should pay an annual dividend of around £133. They also have first dibs over the public in buying shares and can subscribe for a minimum of £500 compared with a minimum of £750 for everyone else.
  • smudges dadsmudges dad Posts: 36,989
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    rusty123 wrote: »
    Nothing like a nice bit of lefty scaremonering to liven a debate. :)

    Thanks for the compliment, it was getting a bit dull.

    Forgetting the righty scaremongering about striking unions, do you think costs will stay at their present levels (which are high) and services will be as good for the next 10-15 years?

    As the service is relatively good at the moment, what are the benefits of privatisation? Availability of capital is a red herring based on (almost) unlimited money being available for HS2.
  • Big Boy BarryBig Boy Barry Posts: 35,293
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    PrestonAl wrote: »
    in the jovial internet speak.. you mad bro.

    I think you might be.
  • glasshalffullglasshalffull Posts: 22,291
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    rusty123 wrote: »
    How would they pay the bills when they're striking for god knows how long?


    They can't...and that's exactly why your notion of NOT striking and using their income to buy shares is a non runner from the start....that income is ALREADY committed to other things.

    On the same basis why don't you start saving all your income for a Rolls Royce....meanwhile eating fresh air, living in the magic pixie's house which you can run on the energy generated a unicorn's horn. :p
  • jjnejjne Posts: 6,580
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    rusty123 wrote: »
    The only choice?

    I think not.

    The other choice would be the correct one -- strip the bad company of its privileged position.

    But the government is too spineless to do that.

    There is only one form of effective regulation of private companies -- aggressive, cut-throat competition.

    They have to be bleeding if the customer is to get a fair deal.

    Unfortunately, this will just be yet another lazy, inefficient, grossly overpriced and arrogant private company which will end up being far worse than the state-run company could ever be -- just like the private IT companies, the private security companies and the rail operators.

    Hurrah for capitalism.
  • jmclaughjmclaugh Posts: 63,988
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    As the service is relatively good at the moment, what are the benefits of privatisation? Availability of capital is a red herring based on (almost) unlimited money being available for HS2.

    Amusingly RM borrow from the government who charge them 8.8%, it is estimated they could borrow from the private sector for 5%.

    As for it being a relatively good service that is a matter of opinion.
  • Uncle FesterUncle Fester Posts: 15,357
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    Where can I buy some shares ;)
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