Royal Mail is being ‘sold off on the cheap’, says Chuka Umunna

September 12, 2013 11:00 am

Today, the government officially confirmed to stock markets that Royal Mail will be privatised in the coming weeks. Estimates put the sale of the postal service at £3 billion when its shares hit  trading floors in 4-6 weeks’ time. Labour have attacked the decision, saying Royal Mail is being ‘sold off on the cheap’. The government has said it will give 10% of the Royal Mail’s shares to its 150,000 postal workers, but the postal union CWU have also opposed the privatisation and are balloting members on strike action. Many predict postal strikes will take place from 10th October onwards.

Chuka Umunna, Shadow Business Secretary, says the government’s privatisation is ‘politically motivated':

“Ministers are pushing ahead with this politically-motivated fire sale of Royal Mail to fill the hole left by George Osborne’s failed plan. The Government has not addressed the huge concerns which remain on the impact the Royal Mail sale will have on consumers, businesses and communities.”

In July, Chuka Umunna said that the government’s plan to privatise the Royal Mail was a travesty:

“This treasured national institution is being sold off on the cheap to get income quickly to a Treasury whose economic strategy has failed. We oppose the government’s privatisation of Royal Mail. Maintaining the Royal Mail in public ownership gives the taxpayer an ongoing direct interest of universal postal services in this country […] and it ensures the taxpayer gets the share in the upside of modernisation and the increased profits which Royal Mail delivers.”

Chuka Umunna also pointed to figures showing the Royal Mail’s profits have more than doubled to £403 million, which means the Royal Mail in public hands could have been self-funded in future and not dependent on government subsidies. The CWU’s deputy leader Dave Ward, agrees:

“I really do not understand what the Government are trying to achieve by this. If you think about the profits the Royal Mail are now making, there’s no need for it to be privatised. What privatisation will do is destroy the UK’s universal postal service. There’s no way private companies can maintain six-day-a-week deliveries to every single address in the UK.”

  • Colin McCulloch

    So, will Labour renationalise it in 2015?

    • The_Average_Joe_UK

      Of course not. Germany denationalised its postal company in 2000 and its a rip roaring success.

  • Daniel Speight

    I hope this is a principled objection to privatization of the post office on the basis that it should always be in public ownership. Maybe there are some that can now see the damage done to the party by Mandelson and company’s call to sell off the post office under the last Labour government.

    • http://twitter.com/waterwards dave stone

      The problem with principled objections is that they have to be applied generally (to attain ‘principle’ status).

      And if the principle is to be applied generally then there will be no reason to exclude the railways, the NHS, and various utilities etc.

      Will Labour be so radical?

      From Labour we should concern for jobs and the universal service. But not not principled opposition to privatisation. That’ll be left to the posties themselves.

  • The_Average_Joe_UK

    Well lets see what can happen with the private sector.

    Wiki: On November 20, 2000, Deutsche Post AG went public. It was the largest initial public offering of the year in Germany and the third-largest worldwide.

    The Mail division delivers approximately 70 million letters in Germany[citation needed],
    six days a week and provides mail services including production
    facilities at central hubs, sales offices and production centers on four
    continents, as well as direct connections to more than 200 countries.

    “Deutsche Post AG, operating under the trade name Deutsche Post DHL, is the world’s largest courier company.[2][3] With its headquarters in Bonn,
    the corporation has 467,088 employees (FTE 421,270) in more than 220
    countries and territories worldwide and generated revenue of € 51.48
    billion in 2010. Currently, 24.8% of its shares are held by the
    state-owned KfW bank, 74.5% are freely floating; 67.0% of which are held by institutional and 7.5% by private investors. Since its privatization, Deutsche Post has significantly expanded its business area through acquisitions. Deutsche Post is listed in the DAX stock market index.”

  • Richard MacKinnon

    Daniel Speight, that is the problem facing The Labour Party, your party is devided on whether this sell off is right or wrong. The vast majority (I would reckon +99%) think it is wrong but the 1% have a lot of clout.

    • i_bid

      And the internal democracy has been purposely removed so not to assert that.

  • http://batman-news.com Lee Denham

    Strikes won’t help us, it will just make the public dis us and help the government to make ppl think we need punishing. It’s a shame that a few years ago our party wanted to do the same thing – it wouldn’t have stopped at part privatisation – we all knew it was just a first step

    http://news.bbc.co.uk/1/hi/uk_politics/8095631.stm

  • http://twitter.com/waterwards dave stone

    Perhaps Chuka could tell us how much Labour would be prepared to accept for the sell-off.

    • rekrab

      Exactly Dave! “sold off on the cheap” come on Chuka, please tell?

      and least we forget the tie in with a modernisation plan for the posts offices to!

      Can we expect Chuka and co on the picket lines? not a hope in hell.

      • http://twitter.com/waterwards dave stone

        Interesting little extract, regarding Brown’s 2009 attempt to privatise the Royal Mail, taken from Mandelson’s autobiography:

        ““The CWU began to lean on Labour MPs to oppose the reforms, and to warn that they would withhold support from candidates in marginal seats who backed the government’s plan. That was no empty threat. The CWU was one of Labour’s largest union sponsors, donating hundred of thousands of pounds to the national and local coffers. It used every political tool it could think of to try and whip up sentiment against the Hooper Plan and modernisation.”

        No guesses as to how the outcome would’ve been different if the TU’s collective relationship with the LP didn’t exist!

        • rekrab

          Absolutely Dave, I had it with all this murky tosh!

          Let the dog see the hare, suspend all funding and support, lets sort this out.

        • BillFrancisOConnor

          Point is it worked didn’t it?

          • http://batman-news.com Lee Denham

            We had a lot of redundancies because of that and you just dont think Labour would have tried to do that. It was common knowledge that part privatising us would be like the first step towards total. Mr Mandelson might say that isn’t true but he cant prove it because the union put pressure on the party. Now Mr Umanna sort of says we could be sold it would be OK by him as long as the price was higher

    • BillFrancisOConnor

      Yesterday you said that EM had kept quiet on the issue – the day before Cable announced it. Now we’ve condemned the privatisation you’ve lambasted us.

      It also sounds like you’ve read the headline of this article and not the piece itself. In your eagerness to take a pop at Labour, perhaps you couldn’t be bothered. Here’s what Chuka actually said:

      ‘We oppose the government’s privatisation of Royal Mail. Maintaining the Royal Mail in public ownership gives the taxpayer an ongoing direct interest of universal postal services in this country […] and it ensures the taxpayer gets the share in the upside of modernisation and the increased profits which Royal Mail delivers.’

      That’s pretty unequivocal isn’t it?

      • The Storyteller

        All it needed was for Mr Ed and his shadow business secretary to loudly and publicly say, well before the (very rushed) sell off that Labour would renationalise RM without any compensation paid when they won the next election and that would have scared the hell out of the markets, ruined the subscriptions and killed the sell off but they stayed silent apart from the odd rumbling… To then add insult to severe injury, EM and his bunch at the top blatantly disregarded the will of conference and a unanimous vote for putting the renationalisation of the Royal Mail in the manifesto for the next election as they were unwilling to write a “blank cheque”… Strange that shortly afterward they COULD afford to renationalise the railways…

        And you wonder why people feel stabbed in the back.

        Elections aren’t won, they are lost and sadly, Mr Ed is going the right way to cursing us to another 5 years of tory damnation.

  • Monkey_Bach

    I bet Peter Mandelson is happy. Eeek.

    • The_Average_Joe_UK

      Course he would. He’s not tied to ideological dogma, is open to fresh ideas, bigger houses and friends in banking.

  • veganpanda

    Typical! Labour saying that Royal Mail is being ‘sold off on the cheap’, and not ‘Royal Mail must NOT ever be sold off!”
    Labour and Tories, 2 sides of the same nasty coin!!

  • treborc1

    And large yachts, to dine the oligarchs

  • whenknew

    Considering Labour planned to sell it for £3 million, these nasty greedy Tories sell it off for £2 million and we (taxpayers) get left to pay their pensions pots and we manage to loose out of £700 million.

    Total scandal.

    http://www.telegraph.co.uk/news/uknews/royal-mail/10373868/Hedge-fund-investing-in-Royal-Mail-employs-George-Osbornes-friend.html#disqus_thread

    I knew that slime-ball had his dirty fingers in this.

    Labour what are you going to do about it?

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