Privatising Royal Mail
The government is trying to defuse anger over its plans to part-privatise Royal Mail. Postal workers are protesting in Westminster after it was announced that 30 percent of the company is to be sold off. Meanwhile, Prime Minister Gordon Brown faces a large backbench rebellion as 145 MPs – more than a fifth of all members of the House of Commons – sign a motion rejecting the move.
Ministers argue that Royal Mail simply cannot survive in its current state and must be part-privatised to fund modernisation and fight a growing pensions deficit which, the Royal Mail pension scheme trustees have warned, could be “significantly larger” than the 5.9 billion pounds estimated last year.
Royal Mail Chief Executive Adam Crozier told MPs he expected the deficit to grow to between eight and 9 billion pounds when it is revalued. Crozier also pointed towards a “rapidly declining” number of letters posted, with an 8 percent drop predicted next year.
But one Labour MP has said that it would be “political suicide” for the party to effectively go back on its election pledge to keep the Royal Mail in public hands. Unions are also against the plan, saying it could lead to job losses and open the door to full privatisation.
Opponents have also argued that the Royal Mail made a significant profit of 255 million pounds in the last nine months of 2008 and, as the government has agreed to take on the pensions deficit, it would be foolish to give away the part of the business that is actually turning a profit. MP Michael Connarty described the move as political suicide and warned that it would split the Labour party down the middle dangerously close to a general election.
The bill is due to be introduced to Parliament on Thursday. Do you think this is something the government should press ahead with or is there a more worthwhile solution? Can you stand the thought of parts of Royal Mail being sold off or is this only going to lead to further privatisation of a national institution?