Undervaluing Royal Mail cost UK Taxpayers 750m.

[Obelix]

Sold on the cheap and people cashed in despite a CoS not shares could not be sold on for 3 years, I think ... People cashed in. Now RM is failing http://www.bbc.co.uk/news/business-27514531

 

Oh he's back. Cool

 

Could you answer the point made in post 47 please - about the RM being required to be sold because the cashpoints were about to run dry?

[Anna B]

Sold on the cheap and people cashed in despite a CoS not shares could not be sold on for 3 years, I think ... People cashed in. Now RM is failing http://www.bbc.co.uk/news/business-27514531

 

Is it? I thought it had just made £12 million profit.

 

However they are talking about stopping deliveries on the unprofitable rural routes, which is exactly what critics of the sell off said would happen, denied by RM of course.

 

Privatisation = profit at all costs for the fat cats, and never mind the customers.

 

With more privatisation, this is going to happen again and again...

[I1L2T3]

That didn't take long did it - already rumblings about viability of the 6 day a week universal service.

 

RM should never have been sold off. Still, the corporate criminals needed to make a fast buck. The damage to communities up and down the land could be lasting.

[muddywolf]

That didn't take long did it - already rumblings about viability of the 6 day a week universal service.

 

RM should never have been sold off. Still, the corporate criminals needed to make a fast buck. The damage to communities up and down the land could be lasting.

 

Look at it in another sense, now it is in private hands the owners are being more financially aware, and advising in the current state it is not viable from a common sense point of view.

 

Would it have been better to keep it in public ownership and have money bleed away year after year and ignore the competition chipping away at the good stuff and carry on supplying the out of reach areas at a loss to the tax payer? (I know right now it is making good money, but they say if the trend continues within 4 years it could be a different picture).

[Stan Tamudo]

Look at it in another sense, now it is in private hands the owners are being more financially aware, and advising in the current state it is not viable from a common sense point of view.

 

Would it have been better to keep it in public ownership and have money bleed away year after year and ignore the competition chipping away at the good stuff and carry on supplying the out of reach areas at a loss to the tax payer?

 

Of course they are, they've made a packet.

http://www.independent.co.uk/news/business/news/royal-mail-float-scandal-how-hedge-funds-cleaned-up-9303674.html

[I1L2T3]

Look at it in another sense, now it is in private hands the owners are being more financially aware, and advising in the current state it is not viable from a common sense point of view.

 

Would it have been better to keep it in public ownership and have money bleed away year after year and ignore the competition chipping away at the good stuff and carry on supplying the out of reach areas at a loss to the tax payer? (I know right now it is making good money, but they say if the trend continues within 4 years it could be a different picture).

 

It's one of those services that should be allowed to make reasonable losses because of the social and economic value of the service. By reasonable losses I mean it should subsidised to cover those losses. There is no way a universal service can be delivered without subsidy so there was never a viable private business on those terms.

 

It should have been off-limits. In less than 5 years I reckon practically everybody will agree with my view.

[muddywolf]

It's one of those services that should be allowed to make reasonable losses because of the social and economic value of the service. By reasonable losses I mean it should subsidised to cover those losses. There is no way a universal service can be delivered without subsidy so there was never a viable private business on those terms.

 

It should have been off-limits. In less than 5 years I reckon practically everybody will agree with my view.

 

How long would a subsidised royal mail be tolerated by the public though? I don't think the vast majority of people care if they send a parcel via uk mail, tnt or parcel force, it's the letter business which will suffer in remote areas, but the need for letters shrinks every year with the younger generation opting for e-mails and texts rather than paper statements or cards.

 

I think the letter business would have been facing an uncertain future in public or private hands.

[I1L2T3]

How long would a subsidised royal mail be tolerated by the public though? I don't think the vast majority of people care if they send a parcel via uk mail, tnt or parcel force, it's the letter business which will suffer in remote areas, but the need for letters shrinks every year with the younger generation opting for e-mails and texts rather than paper statements or cards.

 

I think the letter business would have been facing an uncertain future in public or private hands.

 

I don't recall the public clamouring for privatisation. An important point is that the service had already turned a corner anyway - the mega losses of 10-15 years ago were no longer happening.

[Mecky]

Oh he's back. Cool

 

Could you answer the point made in post 47 please - about the RM being required to be sold because the cashpoints were about to run dry?

 

I just did in 61, is there something you're missing?

 

---------- Post added 23-05-2014 at 06:16 ----------

 

Look at it in another sense, now it is in private hands the owners are being more financially aware, and advising in the current state it is not viable from a common sense point of view.

 

Would it have been better to keep it in public ownership and have money bleed away year after year and ignore the competition chipping away at the good stuff and carry on supplying the out of reach areas at a loss to the tax payer? (I know right now it is making good money, but they say if the trend continues within 4 years it could be a different picture).

 

On the otherhand it will mean fewer staff, that means the taxpayer will have to pay for their upkeep, unless they stop their benefits of course, let's not rule that one one out, and it will generally be a poorer mail service from RM. I also think they should drop the RM name.

[I1L2T3]

I just did in 61, is there something you're missing?

 

---------- Post added 23-05-2014 at 06:16 ----------

 

 

On the otherhand it will mean fewer staff, that means the taxpayer will have to pay for their upkeep, unless they stop their benefits of course, let's not rule that one one out, and it will generally be a poorer mail service from RM. I also think they should drop the RM name.

 

The other problem for the taxpayer is the RM pension fund assets were transferred to the Treasury. This allowed Osborne to claim that he had made a £30bn reduction in the deficit but that was a one-off non-repeatable transfer. The transfer of the assets made the RM sale more attractive because the organisation is less constrained by pension commitments. The problem for the taxpayer is RM pensions have gone from being self-funded through huge assets to now being unfunded with the cost met from annual tax revenue. Every year. For ever. So the loss to the tax payer is not just being shortchanged by the share offer, but also the annual cost of RM pensions that it never had to meet before.