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Vince Cable Plans New Attempt To Privatise Royal Mail

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who would have thought that will happen so soon.

Vince Cable plans new attempt to privatise Royal Mail

Business secretary determined to press ahead with Royal Mail restructuring, risking stand-off with union

The government is preparing for another potentially explosive confrontation with the postal unions by attempting to privatise Royal Mail, the Guardian has learned.

Vince Cable, the business secretary, is determined to press ahead with a restructuring of the group, which could embroil the government in a dispute with the Communication Workers Union.

Cable has asked Ed Davey, his fellow Liberal Democrat and junior minister at the business department, to prepare the plan in detail.

Royal Mail is expected to post a fall in annual profits as a result of last year's strikes.

Cable believes that while Royal Mail remains in state ownership it cannot compete in a liberalised postal market. Ministers are also anxious about Royal Mail's pension deficit, expected to be formally revalued at £10bn next month.

Cable is mindful that Labour's attempts to privatise the postal operator, led by his predecessor Lord Mandelson, failed last summer following a backbench revolt by more than 120 Labour MPs and a campaign by the CWU.

Unions and other campaigners argue that Royal Mail, as a provider of an essential public service, should remain in state ownership. The Lib Dem election manifesto said they would sell 49% of Royal Mail to free up funds for investment in the business. Employees would own half of the remainder in a trust and the government would keep the rest.

It is thought the Lib Dems believe that such an employee trust would help smooth the way for the privatisation, although the CWU is likely to oppose this. The Conservatives had advocated a straightforward sell-off of Royal Mail.

Work has begun to find common ground between the two approaches and the details will emerge over the next few months.

The company made an operating profit of £184m in the first six months of the year, up slightly on the previous year. But the industrial dispute over Royal Mail's modernisation which led to national walkouts last autumn, dented profits in the second half.

The last three months of the financial year, which ends in March, saw an improvement in performance after the CWU and management agreed to work together to modernise the business.

But politicians and Royal Mail are aware of the pressing need to put the group on a stable footing. Next month its pension trustees must present a "recovery plan" to the government demonstrating how the deficit can be plugged. Royal Mail cannot afford to fill the gap although the pension trustees may propose a temporary solution.

The government is likely to offer to meet workers' retirement benefits if privatisation goes ahead, as Mandelson did last year.

A majority of Tory and Lib Dem MPs back some form of privatisation, cancelling out any potential Labour opposition.

But this fresh attempt will also revive last year's auction process to find a buyer which was far from straightforward. When Mandelson shelved the auction last summer and, with it, the privatisation process, he blamed the failure of bidders to make a decent offer rather than the Labour backbench rebellion.

But bidders, such as Dutch postal group TNT, were put off by the likely industrial relations dispute they would face as potential part-owners.

Meanwhile David Cameron and Nick Clegg will describe the coalition agreement tomorrow as a "historic document" in British politics as two parties come together for the first time in more than half a century to agree a joint programme for government. But at the joint launch of the document they will warn of tough decisions ahead as the coalition makes measures to reduce Britain's record £163bn deficit its biggest priority.

"Difficult decisions will have to be taken in the months and years ahead; but we will ensure fairness is at the heart of those decisions so that all those most in need are protected," the prime minister and his deputy write in the foreword to the 30-page coalition agreement.

"Working together, we are confident that we can take the country through difficult times to better days ahead."

The document, modelled on the programmes for government agreed between the various coalition parties that have governed Germany for decades, is broken down into 32 separate sections.

The Tories are pleased that two main planks of their manifesto – welfare and schools reform – have survived largely intact.

Private and voluntary groups will be given a greater in placing the long term unemployed back into work on a payment by results basis. Royal Mail is still searching for a new chief executive after Adam Crozier left to run ITV last month. The group, which has appointed headhunting firm Egon Zehnder to lead the search, did not expect to select a new chief executive until the outcome of the general election – and the new government's plans for Royal Mail – became known. It is being run by chairman Donald Brydon in the interim.

http://www.guardian.co.uk/uk/2010/may/19/royal-mail-privatisation-plan

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"Private and voluntary groups will be given a greater in placing the long term unemployed back into work on a payment by results basis."

This is actually a Labour policy started with FND in 2008

http://www.dwp.gov.uk/supplying-dwp/what-we-buy/welfare-to-work-services/flexible-new-deal/

The idea is that long term unemployed are placed with third party providers, the likes of A4E. Currently the placements are 13 to 26 weeks. The Tories want to get people placed for longer, perhaps 1 year+ which will allow people to stay off the registers for longer.

The subtext is of course (in concert with other initiatives, again commenced under Labour during 2009) a culling of a very top heavy and human resource hungry DWP workforce.

And Vince, good luck with the Royal Mail unions. A rum bunch to pick a fight with if ever there was one.

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Lets be honest, its only the unions, the odd trot voter and a bunch of cuddly old nostaligic grannies that give a rats ar$e about this.

Isnt it?

Most of us use email and private delivery services.

Dont know if its different here, but even all the posties worked through the strike here and didnt have much good to say about the union bosses.

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I think this was pretty much expected from a tory govt, at least

the ground work already done by Mandelson

Good stuff

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I think this was pretty much expected from a tory govt, at least

the ground work already done by Mandelson

Good stuff

Surprising (or maybe not) how much continuity there is.

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Surprising (or maybe not) how much continuity there is.

there is more continuity between Mandelson and the conlibs than there was between Mandelson and Brown

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should be interesting watching this one...good luck to cable a fight too far.....the workers will win this one... :lol:

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should be interesting watching this one...good luck to cable a fight too far.....the workers will win this one... :lol:

Yep, like the miners and British Leyland workforce, they will prevail.

In no way will they be sitting around twenty years, or more, later watching daytime TV with visceral loathing for the, now very elderly and ga-ga, devil incarnate Vinny 'Cable' who single-handedly destroyed the sending messages, by printing them on bits of paper, market 'Coz 'ee hates the wurking claz'.

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Jeff Randall article from September last year:-

Throughout the 1990s, largely undisturbed by overseas competition and electronic mail, Royal Mail made healthy profits. In that decade it clocked up a surplus of about £2.5 billion....

......the business was about to be hit with a sledgehammer from Europe in the form of competition directives, which forced the British government to open up the UK postal market to EU rivals. The new rules took effect in January 2003 (for items weighing more than 100 grams) and January 2006 (50 grams), since when the effort of providing the loss-making universal service while giving up profitable operations to foreign "cherry-pickers" has exacerbated Royal Mail's self-inflicted wounds.

In its eagerness to suck up to Brussels, the Government has created for itself not so much a headache, more an incurable migraine. For although Royal Mail has slimmed down its payroll, eliminated some traditional services and battled to drag the militant element of its workforce out of the Stone Age, it needs to run at a speed hitherto unachieved simply to stand still.

The option for government of increasing subsidies to Royal Mail and the Post Office network as necessary social services – in much the same way that we have poured extra money into schools and hospitals – has been removed by the EU, which has the power to decide how much state aid is allowed

http://www.telegraph.co.uk/finance/comment/jeffrandall/6203228/Shackled-by-EU-rules-Royal-Mail-staggers-from-shambles-to-fiasco.html

[

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Jeff Randall article from September last year:-

Throughout the 1990s, largely undisturbed by overseas competition and electronic mail, Royal Mail made healthy profits. In that decade it clocked up a surplus of about £2.5 billion....

......the business was about to be hit with a sledgehammer from Europe in the form of competition directives, which forced the British government to open up the UK postal market to EU rivals. The new rules took effect in January 2003 (for items weighing more than 100 grams) and January 2006 (50 grams), since when the effort of providing the loss-making universal service while giving up profitable operations to foreign "cherry-pickers" has exacerbated Royal Mail's self-inflicted wounds.

In its eagerness to suck up to Brussels, the Government has created for itself not so much a headache, more an incurable migraine. For although Royal Mail has slimmed down its payroll, eliminated some traditional services and battled to drag the militant element of its workforce out of the Stone Age, it needs to run at a speed hitherto unachieved simply to stand still.

The option for government of increasing subsidies to Royal Mail and the Post Office network as necessary social services – in much the same way that we have poured extra money into schools and hospitals – has been removed by the EU, which has the power to decide how much state aid is allowed

http://www.telegraph.co.uk/finance/comment/jeffrandall/6203228/Shackled-by-EU-rules-Royal-Mail-staggers-from-shambles-to-fiasco.html

[

Would I be right in thinking that you voted UKIP in the last election ?

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Lets be honest, its only the unions, the odd trot voter and a bunch of cuddly old nostaligic grannies that give a rats ar$e about this.

Isnt it?

Most of us use email and private delivery services.

No.

The Swedish mail has been privatised and prices went up three fold

tim

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Royal Mail turned a decent profit last year, so this is obviously not being driven for efficiency reasons: http://news.bbc.co.uk/1/hi/business/8049808.stm

It's selling off assets to pay our creditors, with the RM itself no doubt also ending up in foreign ownership. Obviously Cable has to try to get this done before the austerity riots hit, otherwise this becomes a focus of attention for the general sell-out of the UK by the political class.

Whatever, once globalisation has definitely broken down, it will be re-nationalised by force. I'll give it 15 years.

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Royal Mail turned a decent profit last year, so this is obviously not being driven for efficiency reasons: http://news.bbc.co.u...ess/8049808.stm

It's selling off assets to pay our creditors, with the RM itself no doubt also ending up in foreign ownership. Obviously Cable has to try to get this done before the austerity riots hit, otherwise this becomes a focus of attention for the general sell-out of the UK by the political class.

Whatever, once globalisation has definitely broken down, it will be re-nationalised by force. I'll give it 15 years.

Do you see globalisation breaking-down - why and what sort of triggers do you have in mind CST?

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Whatever, once globalisation has definitely broken down, it will be re-nationalised by force. I'll give it 15 years.

Why would we want or need the state to be running a shrinking, increasingly irrelevant business? Royal Mail / Post office should have been sold off over 20 years ago when BT was put into private ownership. Is there anyone now who looks at the telecoms industry and thinks "you know what, this would be so much better if the government were running it all." ?

.

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Do you see globalisation breaking-down - why and what sort of triggers do you have in mind CST?

It's a long answer really, but I think globalisation is essentially an artificial state that needs constant credit-fuelled growth, because all the nations involved in the process have to keep the majority of their populations happily employed (or on a decent level of welfare if they aren't).

The issues therefore are firstly production capacity and available resources. We have an almost grotesque level of productive overcapacity around the globe, and increasingly limited resources. And no more credit to pull in future demand.

Triggers will be trade demand dropping, diminishing oil resources, resource-protectionism (i.e China re: precious metals), debt default, existing ethnic tensions (I guarantee the Serbs will go back into Kosovo, for example), breakdown of civil order in industrial nations.

Those are just the known unknowns, of course.

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Why would we want or need the state to be running a shrinking, increasingly irrelevant business? Royal Mail / Post office should have been sold off over 20 years ago when BT was put into private ownership. Is there anyone now who looks at the telecoms industry and thinks "you know what, this would be so much better if the government were running it all." ?

.

Royal Mail has been in state ownership since 1516 - it wasn't some private industry that Nye Bevin chose to nationalise in a fit of socialistic fervour in the 1950's. For 500 years, Kings and Governments have thought it better to be in state hands. Why does Vince Cable think better now?

Any privatisation is based on a series of short-term assumptions that I don't think will necessarily play out over the longer term - that neighbouring European nations will always be friendly, that electronic communications will continue to spread, that private companies will always be able to raise appropriate capital etc.

The first time we are threatened by a foreign power, it will be nationalised. Don't assume that time will be too far away.

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Globalisation will be called NWO, only it won't be by choice, it would be forced upon everyone.

USSR style.

Edited by DisQ

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It will be called NWO, only it won't be by choice, it would be forced upon everyone.

USSR style.

No it won't, no matter how much the elites would like it this way.

Expect a phase change. Little countries, all hating each other. Just like God intended.

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It's a long answer really, but I think globalisation is essentially an artificial state that needs constant credit-fuelled growth, because all the nations involved in the process have to keep the majority of their populations happily employed (or on a decent level of welfare if they aren't).

The issues therefore are firstly production capacity and available resources. We have an almost grotesque level of productive overcapacity around the globe, and increasingly limited resources. And no more credit to pull in future demand.

Triggers will be trade demand dropping, diminishing oil resources, resource-protectionism (i.e China re: precious metals), debt default, existing ethnic tensions (I guarantee the Serbs will go back into Kosovo, for example), breakdown of civil order in industrial nations.

Those are just the known unknowns, of course.

Some interesting thoughts in that reply - cheers CST.

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No it won't, no matter how much the elites would like it this way.

Expect a phase change. Little countries, all hating each other. Just like God intended.

lets hope so, but we got surprise (or not depends how its presented) for us.

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should be interesting watching this one...good luck to cable a fight too far.....the workers will win this one... laugh.gif

'workers' ?

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Globalisation will be called NWO, only it won't be by choice, it would be forced upon everyone.

USSR style.

The UK is located right next to the New World Order already. It's called Europe, and is the model. Top-down, statist, elitist, completely undemocratic and ravenously expansionist.

If the Euro fails, I shall be the first to celebrate...

(Not because I wish ordinary Europeans to suffer harm, but because it would set back the globalist movement for decades.)

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Lets be honest, its only the unions, the odd trot voter and a bunch of cuddly old nostaligic grannies that give a rats ar$e about this.

Isnt it?

Most of us use email and private delivery services.

Dont know if its different here, but even all the posties worked through the strike here and didnt have much good to say about the union bosses.

I think there is more to this than that.

By allowing private companies to come in and takeover parcel deliveries they deprived Royal Mail of key revenue. Bringing in private companies to pick and chose the most profitable chunks of the business is further going to put the whole thing at risk. Whilst it may be very possible to deliver between and around the big cities at a profit for these companies, the whole point of the Royal Mail is to provide a universal service to the whole UK. All we are going to end up with in a few years time is the cities being flooded with numerous private compaines delivering to the same addresses (as happens now with the packages - we rely on deliveries and couriers turn up all throughout the day - 10(?) years ago they would all have come on the same van.

Much like the pathetic provision of the internet in rural areas and smaller towns the private companies will not want to go near the 'unprofitable areas' and the Governemnt is still going to have throw subsidies at the system to ensure collections and deliveries over much of the country.

It all seems rather pointless to me, keep the whole thing together, bring back the parcel delivery and continue to provide the universal service - I think that would be against EU regulations that require more competition but right now no one is really benefiting.

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