Sunday, 13 October 2013

I despair at the sell-off of Royal Mail

In the next edition of the Cornish Guardian, my article will cover the privatisation of Royal Mail. It is as follows:

Margaret Thatcher declined to privatise the Royal Mail in the 1980s, famously stating that she was “not prepared to have the Queen’s head privatised.”

Sadly, the present Conservative and Liberal Democrat Coalition have had no such qualms, and have sold off over half of this longstanding British institution.

The Communication Workers Union (CWU) has condemned the sell-off, adding that that the Royal Mail had been undervalued and “sold on the cheap,” with the “low share price being another Government error” that compounded the “mistake to sell in the first place.”

TUC General Secretary Frances O’Grady has meanwhile claimed it was “little different from selling £5 notes for four quid.”

I share the views of both the CWU and TUC. I worry that the sell-off could lead to a more expensive service as it will – in future – be run for the benefit of shareholders. And I worry that there will be a less expansive service, with services to rural areas most at risk.

The shares were initially sold at 330p each, rising to a high of 459p, before settling back to about 440p. Some 10 million shares were sold in the first thirty seconds of trading on Friday, 100 million shares were sold in the first hour and, over the day as a whole, 229 million shares changed hands – ensuring that many people made a very “quick buck.”

But is also the case that two-thirds of the available shares in Royal Mail were sold to “institutional investors,” including “sovereign wealth funds” in countries as diverse as Kuwait, Norway, Singapore and the United Arab Emirates.

One of the world's biggest hedge funds – which employs the Chancellor of the Exchequer’s best man – is reported to have purchased a £50 million stake in the company which – after just one day – was valued at approaching £68 million.

And this is a firm that, according to the Daily Telegraph, made a “reported £100 million from the financial crash by betting that the price of Northern Rock would fall,” and its former chief executive was “awarded a knighthood last year after donating £500,000 to the Conservative Party.”

I frankly despair at the Government’s ongoing privatisation of our public services.

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