Royal Mail sale

[David Johnson]

So let's get this right.

1. The government is selling off Royal Mail.
2. The demand for shares exceeds tenfold the number of shares available.
3. Apparently one of the reasons the stock market has gone down this week is because investment funds have been flogging off shares in order to get into Royal Mail shares.
4. 2 and 3 suggest that the Royal Mail is grossly undervalued. Current estimates are that the sale will make ?3.3 billion.
5. The Royal Mail is currently making a profit for the taxpayer in public hands.
6. As a sweetener for the sale, the government is taking ownership of the Royal Mail pension fund which has a black hole of about ?8 bn.

So it's in profit under public hands and the government is flogging it for about ?3.3bn whilst taking responsibility for an ?8bn pension black hole.

Mmm, I can see the unemployed and the less well off being lined up for another severe kicking.

[sparky]

Yet another sell off of what ultimately is a essential public service.

Prior to 1995 our railways were not referred to as an industry, electricity, gas and water were once called utilities etc.

The number one priority should be provision of essential services at a price affordable to all. In a perfect world each would cover all day-to-day and long term costs so not a tax burden but equally no profit to be trousered.

Instead we have situations like Arriva that are a subsidiary of the German government. Hence profit from the various UK rail operations they are involved with, which could include subsidy from UK public funds, is ultimately effectively a subsidy to the German state .....

[bernard72]

By your understanding, if Glastonbury has 200000 tickets for sale at ?100 each but there are 500000 people wanting them, then the tickets should in fact be ?250 each.
Therefore only the better off should go to Glastonbury.
Forgive me if I am wrong

[andy at handiwork]

There is an obvious difference between selling tickets to a privately run music festival and the selling off cheap of publicly owned assets.

[bernard72]

Try reading point 2, and point 4.
Exchange shares for tickets, you may get my point.
Not trying to be funny or justifying the selloff of the Roya lMail that Lord Mandelson wanted.

[Essex Lad]

There are certain things in a civilised society that should not be expected to make a profit.

Among these I would number:
schools
health service
public transport
water
gas
electricity
Royal Mail

There are enough things for capitalists to make a profit on. All of the things I have listed are essential for the functioning of a democracy and any politician who is/was involved in their sell-off should hang their heads in shame.

[Zorro]

Yes the Royal Mail is making a profit right now, but for how long will that last, the profit in mail currently comes from parcels, and the Royal Mail, although they do this quite well, are no where near as good as some of the other companies out there.

In order for the Royal Mail to compete in this market place they need to invest and invest big and quickly, in the hands of the government they cannot do this, so the only way for the Royal Mail to take control of the package market place is to be taken over and run privately. Otherwise it will slowly lose market share and then there will be huge redundancies.

I have a friend in senior management at the Royal Mail, and he believes this is the best way forward for the Royal Mail to survive, which I thought was quite interesting.

[David Johnson]

"Yes the Royal Mail is making a profit right now, but for how long will that last"

Well I doubt if the investment funds and hedge funds are falling over themselves to buy shares and lose the shirts of their backs.

"In order for the Royal Mail to compete in this market place they need to invest and invest big and quickly, in the hands of the government they cannot do this, so the only way for the Royal Mail to take control of the package market place is to be taken over and run privately."

You have absolutely no evidence to back this up. The government is about to invest northwards of ?50 billion in HS2 alone. If you look at the case of other utility sell-offs you will see that the main approach used by the private sector is to:

1. Buy the utility with debt.
2. Use the debt to greatly reduce any tax liability they might have on profits.
3. Do as little investment as possible and instead come cap in hand to the government (see water utilities e.g. Thames Water for examples) pleading poverty and demanding a government subsidy.

[David Johnson]

"Forgive me if I am wrong"

You are wrong and I forgive you.

There is absolutely no comparison between selling a public service like Royal Mail and getting tickets for Glastonbury.

On the one hand, the Royal Mail is owned by the taxpayer and the government is selling this publically owned service. Clearly what they should be doing is maximising the income for the taxpayer in selling off this service that you and I own.

In the case of Glastonbury, the festival is not publically owned. It is a private venture and the people who own it will charge whatever they feel is appropriate.

Any attempt to draw an analogy between the two is totally spurious.

[max_tranmere]

I wouldn't be surprised if the whole thing ends up foreign owned, like so many of the State-owned utilities that Thatcher sold off now are. So look forward to the Puesto Nacional, the Nationalen Post, the Nationale Posterijen or even the των εθνικών ταχυδρομείων.