The privatisation of Royal Mail will mean scrapped services

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The privatisation of Royal Mail will mean scrapped services and inflated prices

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Now the government has announced its intention to privatise Royal Mail, we must face up to the prospect of what the postal service might look like in a few years’ time. If the energy or rail privatisations are anything to go by those prospects are not good.

To compound growing concerns we are told that a sale of Royal Mail to private equity investors is firmly on the agenda. The private equity model for investment is well established: buy entity, strip costs, maximise value, sell on.

For this to work in Royal Mail it must inevitably mean cutting out loss making (mainly rural) services and raising prices. Save Our Royal
Mail has been launched in response to this. Our aim is to ensure that the current levels of service Royal Mail provides are not diminished by a sale, nor are prices sent shooting up.

These are very real threats: we predict that First Class stamps will soon hit £1 following a sale. Our campaign also argues that rural services will be cut by a process of stealth in order to get around legal requirements, something that in effect is beginning to happen already.

As with most public services, those that most need Royal Mail are the most vulnerable to its changes. Older people are the most likely to stop sending letters and cards when stamp prices rise. Small businesses are very sensitive to price rises for packets and parcels.

People in rural areas are most in need of the daily delivery service.

Yet all these groups are likely to suffer under a privately owned Royal Mail. Despite assurances from ministers, it is hard to see where value can be extracted from the business without significant cost cutting.

Equally, now that most stamp prices are no longer regulated, the new owners will be free to hike prices up in the many parts of the business that are not subject to competitive pressures.

Our campaign is asking ministers to press ‘pause’ on this sale. There has been so little debate about the future of postal services and how long term consumer protections can be put in place. At the moment the government seems keen to rush the sale but not so keen to debate the issues in Parliament and elsewhere.

Please visit our website Save Our Royal Mail for more information on how to get involved http://saveourroyalmail.org/" onclick="window.open(this.href);return false;