Mark Lazarowicz: Royal Mail must stay in public hands
The Royal Mail is a vital part of our past and present, delivering anywhere in the UK everything from bills and bank statements to Christmas cards and increasingly goods ordered online.
But its future is under threat. Royal Mail’s financial report for 2012-13 just published shows that its overall operating profits more than doubled over the last year from £152m in 2011-12 to £403m in 2013-13.
That makes it very hard to understand why the UK Government wants to sell off Royal Mail. My concern is that ideology is being put before the interests of customers, just as it was with earlier privatisations.
If privatisation goes ahead, the Postal Services Act 2011 obliges the Government to offer ten per cent of shares to employees, but it has not said whether that will be free of charge or at a discount.
Much else remains to be clarified: the Government has said that its preference is for the remainder of the shares to be floated on the stock market, but that all options remain on the table, including a foreign buyer if flotation proves impossible.
The Government appears to favour the Post Office becoming a mutual, and I would like to see it explore that option in the case of Royal Mail as well.
Despite their separation, privatisation of Royal Mail would mean uncertainty for the Post Office as it remains dependent on Royal Mail for business. In January 2012, the two agreed a ten-year deal under which the Royal Mail would continue to use the Post Office to deliver a range of services. There is no guarantee this arrangement will continue after that, though, particularly if privatisation goes ahead.
Another major threat to a UK-wide postal service would inevitably come from Scotland becoming a separate state from the rest of the UK. If Scotland were to become independent, there must be questions about whether the current integrated UK-wide postal service would still operate. And the fact that Scotland has relatively more remote and island areas than the rest of the UK would almost certainly make a separate Scottish postal service more costly to run.
The Royal Mail has been part of our way of life for centuries and its latest accounts show that it is proving itself a highly successful company serving communities throughout the UK, but in the public not the private sector -–it should stay that way.
• Mark Lazarowicz is the Labour MP for Edinburgh North and Leith