Thursday 6 January 2011

Post Ofice Privatisation

I seemed to receive a rather large number of Christmas cards this year featuring pillar boxes or post boxes, and assumed this was some sort of subliminal protest against their privatisation. However, in the end the robins outnumbered the post and pillar boxes by eight to five.

I expect I am not alone in thinking that the Post Office and the Royal Mail are one and the same organisation, but apparently they are separate. The Post Office is to be "mutualised" and it is the Royal Mail which is to be pivatised. As far as I know our local Post Office belongs to our postmaster who has some sort of licence to run it (as does Susan in The Archers) so presumably it is the big post offices in the cities, the Crown Post Offices, that are to be mutulaised. I'm not clear what that involves but it sounds reasonably in tune with Liberal thinking.

The privatisation of the Royal Mail includes a gesture towards Liberal thinking, in that ten per cent of the shares are to be allocated to the staff. However, this is only a pale imitation of the wonderful schemes the Liberal Party dreamed up in the 1960s with the aim of substituting co-operation for the capital/labour confrontation which did so much harm to British industry. I can't now remember the exact details but the general idea was that the boards of all firms over a certain size should comprise one third representatives of the shareholders, one third the employees and one third the community. Hence no one group would be able to force a decision without the support of at least some of the others. This would, of course, apply to the size and distribution of the profits, of which the employees could, if they wished, have a share.

Ten per cent share ownership is a rather tame step in this direction but, now that Liberal Democrats are in government it is surely time to revive interest in the revision of company law, which at present requires that companies act solely in the interests of their shareholders. Shareholders may invest only a few pounds in a company: employees often invest their lives.


  1. I take it though you're broadly in favour of the privatisation? It has of course been the part-privatisation and top-down control of national ownership that has turned the Post Office from being a net contributor to government receipts, to a massively loss-making network (which of course, has prompted the closure programme).

  2. No, I am not broadly in favour of privatisation: there is no evidence that the private sector is more "efficient" (however that is defined) than the public sector.

    What I am in favour of is reforms to encourage capital and labour to work together with the wider community in a common cause, such as the co-operative movement and the schemes for revision of company law outlined above

    I think it's the Royal Mail, not the Post Office, which has turned into a major loss-maker, largely through allowing private companies the "cherry-pick" the easy bits and leave the Royal Mail with the more difficult parts of the one price universal service.