The news that the Westminster government's remaining 30% stake in the Royal Mail is to be sold and some £3 billion pounds are to be cut from government spending this year won’t surprise many people.
The last remaining UK Government stake in the Royal Mail currently valued at £1.5 billion is to be used to pay down the national debt. Another£3 billion pounds of cuts are pending, they will be announced in July. Back in July 2013 the news that the Post Office profit rose from £ 152 million pounds to £ 403 million pounds (in the 12 months up until the end of March 2013) would once have been warmly welcomed.
The increase in Post Office profits actually made little difference; the Lib Dems (notorious locally for campaign to keep open local Post Offices that were not under threat of closure) with their Conservative collation partners decided to privatise the Post Office. The Party formerly known as Labour (in Westminster) were understandably silent over the matter of Post Office privatisation, understandably as they had spent years crying crocodile tears, as they tried and failed (under Peter Mandelson) to privatise the Post Office themselves during what is increasingly been seen as their largely wasted 13 years in government.
Now don't get me wrong, I had absolutely no problem with the publically owned Post Office exercising the maximum amount of commercial freedom to go out and diversify and to make money (as happens in the Netherlands and in other countries) but happen to firmly believe that the privatisation of the Post Office was entirely ideologically driven and unnecessary. I still have major concerns about the longevity of the unprofitable rural postal operations – how long will it be before they are dropped because they don’t make enough profit?
The Post Office, rather than be simply sold off to a private company was floated on the stock market, and its shares were sold off. The business has been valued at something between £ 2 billion and £ 3 billion pounds with up to 10% of shares being set aside for postal workers. Not surprisingly, probably along with most people, the members of the Communication Workers Union were understandably firmly opposed to the privatisation of the Post Office – unlike the Labour Party.
There are still potentially big and as yet unanswered questions as to how will the government go about selling it off? Will Westminster’s friends in the City - big institutional city investors - get some sort of preferential opportunity to buy shares? Perhaps the Conservatives will go for a big share sale to the public or drip feed shares into the market, as has happened with the Lloyds Bank shares?" Whatever happens expect near complete silence form the Party formerly known as Labour…