The Sale of Royal Mail: Why It Matters copertina

The Sale of Royal Mail: Why It Matters

The Sale of Royal Mail: Why It Matters

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 In case you missed it, the government has just approved the sale of a majority stake in Royal Mail to Czech billionaire Daniel Kretinsky's EP Group. This means that one of the UK’s most historic institutions will now be predominantly owned by a foreign national. Many were surprised by this news, with some mistakenly believing this marks the start of Royal Mail’s privatisation. However, the truth is that this process began years ago.A Brief History of PrivatisationRoyal Mail was privatised in stages between 2013 and 2015, spearheaded by Vince Cable and the Liberal Democrats during the coalition government. It’s worth noting that the Lib Dems, often perceived as a moderate or progressive party, lean quite heavily towards free-market economics, similar to the Conservatives. This sale was a continuation of their economic philosophy, and now we’re seeing the consequences of that decision unfold.The recent government deliberations weren’t about whether Royal Mail should be privatised—they consider that ship as long since sailed—but whether foreign companies or individuals should be allowed to own what remains a vital part of the UK’s infrastructure.The Problem with Privatising a Natural MonopolyRoyal Mail is what economists refer to as a “natural monopoly.” Simply put, it’s nearly impossible for another company to replicate its reach and infrastructure, especially when it comes to letters. While parcels are a more competitive market, the universal postal service—a commitment to deliver letters anywhere in the UK for the same price—is a unique obligation.The government has ensured that this universal service requirement will remain for at least five years under the new ownership. But after that? Who knows?I want to be very clear about what I believe about this and similar sell-offs: vital infrastructure like Royal Mail, healthcare, and public transport should not be privately owned. The argument that privatisation makes services more efficient simply doesn’t hold up. Has Royal Mail become better since it was privatised in 2013? Has it become cheaper? The answer to both questions is a resounding “no.” By every objective measure, the service has deteriorated.Infrastructure Shouldn’t Be About ProfitNatural monopolies like Royal Mail should exist to serve the public, not to generate profit. Expecting services that are essential to daily life to turn a profit is nonsensical. Do we expect pavements in our towns or schools to be profitable? No, because they’re fundamental to a functioning society. I say ‘we’ because I think this is what the vast majority of the public believe, but unfortunately we are seeing this push form all the big parties for schools to be ‘profitable’ via ‘academisation’. It shows how dangerous this thinking is - it can lead to real problems, where everything is about money rather than public good.Royal Mail plays a critical role in the economy, enabling businesses to send letters and parcels at a consistent cost, regardless of the recipient’s location. Without this universal pricing, businesses would face chaos—imagine having to get a bespoke quote for every letter you wanted to send!This consistency is something a private company, driven by the need for profit, struggles to maintain. It’s not commercially viable to offer uniform pricing for deliveries to both central London and remote parts of Scotland, but it is vital for the country as a whole.Labour’s Missed OpportunityYou might think that a Labour government, theoretically more sympathetic to public ownership, would have stepped in to address this. But today’s Labour isn’t the party of the 1970s; it’s not committed to left-wing policies in the way many assume and hope for. In fact, the decision to allow this sale reflects a broader ideological consensus across most of the political spectrum: an embrace of privatisation and market forces, even for services that should remain public.This isn’t a problem exclusive to the Conservatives or Reform. The Liberal Democrats initiated the privatisation, and Labour, despite being nominally on the left, hasn’t challenged the broader trend.A Green Party PerspectiveThe Green Party remains one of the few political voices advocating for public ownership of vital services. Whether it’s water, transport, or the postal service, the Greens argue that these essential elements of our infrastructure should be run for the public, not for profit.As a Green, I’ve been saying this for years: the UK needs to rethink its approach to public services. Universal services like Royal Mail aren’t just businesses—they’re the backbone of our society. Allowing them to be sold off to the highest bidder, whether they’re British or foreign, erodes that foundation.The Future of Royal MailSo, where does this leave us? For the next five years, the universal service obligation will remain. But after that, there are no guarantees. Will we still be able to ...
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