Delivering profits without risk.
The problems of the Royal Mail are really quite intriguing.
Here is a company that has spent over 180 years building up a network which has to, by law, be able to visit every house, office, company and site in the whole of the UK 6 days out of 7 and carry post and parcels there from every other property in the UK.
Yet in an age when the High Street is dying and more and more products and purchases are being delivered to your front door, it is struggling to survive.
As the CEO told his striking workforce the other day “We are now fighting for the life of this business”. Just 10 years after privatisation the company is apparently on the very edge of the precipice.
Strange that the invisible hand of free market competition has not allowed it to win business and that its total monopoly is not profitable and that just one strike by its workers is apparently enough to bring the company down.
Maybe like many other privatisation, it has a management that suddenly thinks being a private sector company means slashing workers wages and benefits but much higher wages and rewards for them, rather than actually running the business better.
However one thing is pretty certain, no government can permit the end of universal postal delivery. The damage to the elderly, remote regions, small businesses, the running of the state, tax collection and the economy would be disastrous.
If the Royal Mail goes bust it will be re-nationalised in some form.
Just like the water companies, the rail companies, the electricity companies and apparently even the banks; you can run your business into the ground and take out huge amounts of money for yourself, safe in the knowledge that if necessary the poor tax payer will pick up the bill.
This isn’t really privatisation, it is monopoly profits for fat cats, underwritten by the state.
A really good rule for privatisations would be, if the state can’t afford to let a company go bust it shouldn’t sell it.
Economics, trade and Brexit, not necessarily in that order but the dog always comes first.
By Jonty Bloom Media