Royal Mail privatisation

[bsc]

Sneaked out on Newsnight there the fire sale will be announced to the markets at 7am tomorrow morning.

Tory donors waiting like vultures for a return on what they paid for.

Let the backlash commence. These are our assets being flogged to plutocrats.

 

[Drifter]

Slowly but surely the NHS will be next if the Tories get there way. Looking very likely there will be strike action.

 

[Don't Kill Bill]

The British tax payer has taken on the pension debt valued at 9 billion pounds. How much will we raise in this sale and if we don't get our 9 billion back then shouldn't the money be put to one side to cover some of the pension deficit?

 

[Silva]

The British tax payer has taken on the pension debt valued at 9 billion pounds. How much will we raise in this sale and if we don't get our 9 billion back then shouldn't the money be put to one side to cover some of the pension deficit?

As far as I remember, they were looking to sell it for 8.9bn.

 

[SteveJ]

A Guardian article states that £3bn is the price:

http://www.theguardian.com/business...float-royal-mail-stock-exchange-privatisation

 

[Zen86]

It's not like our taxes are going to still end up part-funding it whilst private investors take it for everything it's worth now.. oh wait

 

[maniak]

It's insane, this systematic destruction of public services in the european countries.

The old argument is that public companies are badly run and cost a lot to the taxpayer, but here in Portugal the mail is public and every year they have a profit of over 50 million euros, which is used by the government for other expenses. Now they're going to be privatised after recomendation of the IMF. Result: less money for the state, cuts in services, especially in the rural areas where old people depend of the mail stations not only for mail but to pay for public utilities and other services.

Bastards...

 

[Penna]

It's insane, this systematic destruction of public services in the european countries.

The old argument is that public companies are badly run and cost a lot to the taxpayer, but here in Portugal the mail is public and every year they have a profit of over 50 million euros, which is used by the government for other expenses. Now they're going to be privatised after recomendation of the IMF. Result: less money for the state, cuts in services, especially in the rural areas where old people depend of the mail stations not only for mail but to pay for public utilities and other services.

Bastards...

Public services should never be privatised, IMO. As you say, it is possible to run them and still make a profit, if they are managed properly and adopt modern working practices. I would love to see all utilities and public transport returned to public ownership in the UK.

 

[Slevs]

Public services should never be privatised, IMO. As you say, it is possible to run them and still make a profit, if they are managed properly and adopt modern working practices. I would love to see all utilities and public transport returned to public ownership in the UK.

In some cases, they do or they should be allowed to. Back in the day, a french company came in with an offer to take over the electricity company over here in Lebanon. The government owned company was failing badly and wasn't making a profit. I was too young at the time but the story goes that the French identified too many private costs (mostly politicians feeding their pockets and employing their yes man) that even they couldn't make a profit, so they didn't complete the take-over and left. Present day, and we're still a country full of high utility expense and poor service.

 

[maniak]

In some cases, they do or they should be allowed to. Back in the day, a french company came in with an offer to take over the electricity company over here in Lebanon. The government owned company was failing badly and wasn't making a profit. I was too young at the time but the story goes that the French identified too many private costs (mostly politicians feeding their pockets and employing their yes man) that even they couldn't make a profit, so they didn't complete the take-over and left. Present day, and we're still a country full of high utility expense and poor service.

But the point should be to eliminate corruption and bad managment, not say "feck it, we're corrupt incompetents, might as well give up".

In most western countries corruption in mail services and other public utilities is minimal and many give profits because they are well managed. Selling these companies is a terrible service to the public.

 

[Silent_Running]

I can't believe they are actually going to go through with this. The conservative party really have become caricatures .

 

[peterstorey]

Public services should never be privatised, IMO. As you say, it is possible to run them and still make a profit, if they are managed properly and adopt modern working practices. I would love to see all utilities and public transport returned to public ownership in the UK.

If you put utilities into private ownership they want to take out at least 15% per annum in profit. This has to be paid for by reducing the level of service, raising prices and reducing wages.

 

[Jippy]

The proposed structure of the IPO does at least seem to offer staff a reasonable chunk of equity. Utilities aren't normally the great investment some of you seem to think. They are heavh regulated in terms of their pricing and have massive capex to fund. They spew out dividends and are highly cash generative but we've let better things go on the cheap in stupid moves.

 

[peterstorey]

Utilities aren't normally the great investment some of you seem to think. They are heavh regulated in terms of their pricing and have massive capex to fund. They spew out dividends and are highly cash generative but we've let better things go on the cheap in stupid moves.

They are if they're allowed to increase bills by about 20% pa in a captive market. 'Thames Water has made profits of £1.7billion over the last five years on the back of a succession of inflation-busting increases in bills'.

 

[Jippy]

It is a double-edged sword. I'm not going to buy the government line that privatisation will improve efficiency and increase competition but on the flipside, do we want to kjeep funding these creaking institutions? How many people seriously use the Royal Mail on a regular basis? It feels like a dying business.
It is not a total one way street. The government raped the telecoms industry on the 3g auction and happily (and rightly in my view) killed shareholders, including big institutions like Fidelity on Railtrack and Dexion I think, on Northern Rock, with expropriations, effectively.

 

[peterstorey]

It is a double-edged sword. I'm not going to buy the government line that privatisation will improve efficiency and increase competition but on the flipside, do we want to kjeep funding these creaking institutions? How many people seriously use the Royal Mail on a regular basis? It feels like a dying business.
It is not a total one way street. The government raped the telecoms industry on the 3g auction and happily (and rightly in my view) killed shareholders, including big institutions like Fidelity on Railtrack and Dexion I think, on Northern Rock, with expropriations, effectively.

The two sides to RM are a massively profitable parcels business driven by internet delivery and a massively unprofitable universal letter delivery service. If one subsidises the other that's all to the social and economic good. If it's privatised the greedy feckers will find a way to lose the unprofitable bit (probably getting the taxpayer to fund it). You can see this in action with BT not delivering fast bb to rural areas without sweeteners.

 

[Wibble]

Privatisation of essential services rarely works out well.

 

[Jippy]

The two sides to RM are a massively profitable parcels business driven by internet delivery and a massively unprofitable universal letter delivery service. If one subsidises the other that's all to the social and economic good. If it's privatised the greedy feckers will find a way to lose the unprofitable bit (probably getting the taxpayer to fund it). You can see this in action with BT not delivering fast bb to rural areas without sweeteners.

Would a government-owned BT really have delivered fast broadband to rural areas in any hurry either though? As for RM, yep the parcels business is all good, but the price of stamps has been soaring for ages. I've not checked the fine print of the deal and would hope that the terms of the privatisation include a cap on the price rises they can bring in, probably inflation-linked, as with most utilities.

 

[hp88]

Last day to buy/apply for shares.

https://www.gov.uk/royalmailshares

 

[peterstorey]

Shouldn't be sold off. I hope the speculators burn their fingers (unlikely since it's undervalued by about £1Bn).

 

[Irwinwastheking]

Can someone explain to me how selling off a profit making wing of the public service makes sense? I actually don't get it unless the government literally need the cash immediately.

 

[peterstorey]

It doesn't, unless you are in the business of rewarding your mates by undervaluing an asset and then allowing them to make rapacious profits by beating up the workforce and shafting the consumer.

 

[Irwinwastheking]

It doesn't, unless you are in the business of rewarding your mates by undervaluing an asset and then allowing them to make rapacious profits by beating up the workforce and shafting the consumer.

And at the same time costing the tax payer loads of money in guaranteed profit's and subsidies. Privatisation is disgusting and has gone way too far in the UK already, and I'm a slightly right of centre thinker.

 

[peterstorey]

Privatisation sees companies make at least 15% ROI. This extra 'tax' has to result in worse service, higher prices or poorer wages - usually a combo of all three.

 

[Kraftwerker]

So those who bought £750 of shares (the minimum) will get their £750 and those who tried to buy £10,000+ will get nothing.

Does this mean all the fat cats and spivs have been fecked over?

I hardly think so, so what's the catch?

 

[hp88]

33% was available to general public, the other 67% will be taken buy the city.

 

[hp88]

Opened at 456p.

 

[Marching]

Nice profit on my £750 invested....not that I'm selling.

 

[Nogbadthebad]

Pass off the pension debts of £9 billion to the tax payer, sell the entire company for £3.3 Billion.

fecking moronic.

 

[Sultan]

Seems absurd that foreign investors are making Millions tonight, whilst British taxpayers to whom the asset belonged to get a miserly £750.00. If the government were so intent on privatising then the British public should have been the preferred buyers. If foreign sovereign funds wanted to buy then they should have been told to buy from the market.

 

[Drifter]

Royal Mail plans to cut 1,600 jobs

http://www.bbc.co.uk/news/business-26728116

 

[Jippy]

Moya Greene is very highly rated as a chief executive- she has a lot of City backing but yep, that is a lot of job cuts but they need to cut costs.

 

[peterstorey]

Royal Mail plans to cut 1,600 jobs

http://www.bbc.co.uk/news/business-26728116

Shareholders need their return on investment so workers and/or customers gotta pay.

 

[peterstorey]

Customer to get shafted now. Usual privatisation story of 'efficiencies' achieved by screwing over workforce and users.

http://www.bbc.co.uk/news/business-27514531

 

[Member 39557]

Why do we sell off everything? Short term gain, long term pain!

 

[The Mitcher]

Why do we sell off everything? Short term gain, long term pain!

Money. Pretty much.

 

[Member 39557]

Money. Pretty much.

In the long term, the public end up getting screwed every time.

 

[JustAFan]

The US Postal Service is in a downward spiral also for a variety of reasons. Competition for package deliveries from UPS, FEDex, etc. The change technology is bringing to how we communicate, email, text messaging, etc. The change technology is bringing to how businesses use the mail, many people optiing for electronic bills and payments, online banking, even fewer mass mailers by companies.

How are these things affected the Royal Mail?

 

[Feed Me]

The US Postal Service is in a downward spiral also for a variety of reasons. Competition for package deliveries from UPS, FEDex, etc. The change technology is bringing to how we communicate, email, text messaging, etc. The change technology is bringing to how businesses use the mail, many people optiing for electronic bills and payments, online banking, even fewer mass mailers by companies.

How are these things affected the Royal Mail?

Parcels is the growth area. With online shopping, there's scope for Royal Mail to make a killing. The Tories undervalued the business shockingly. Traditional post is becoming an irrelevance.

 

[Jippy]

Parcels is the growth area. With online shopping, there's scope for Royal Mail to make a killing. The Tories undervalued the business shockingly. Traditional post is becoming an irrelevance.

Vince Cable is the business secretary.