Royal Mail: The Modernizers Defeat the Moderators

May 5, 2009

The government has rejected a moderate compromise solution to reform of the Royal Mail, preferring to push ahead with unpopular and probably disastrous plans for a part-privatization – handing over operations to the Dutch firm TNT.

A plan suggested by the think tank Compass, which was “examined” by ministers (and torpedoed by the only one that mattered, Peter Mandelson) would have created a not-for-profit firm along the lines of Network Rail. Thats despite the fact that the Royal Mail made a profit of £225 million in the first three quarters of this financial year.

Nevertheless, the mail needs “modernization” (a word that sends shivers down employees of the NHS these days). And it needs to be privatized to provide a windfall for New Labour’s funders and assorted wealthy friends.

But Compass may be off the mark in their call for another Network Rail, which has been heavily subsidised to mask its inherent failings as a stand-alone firm.

As Private Eye’s “Dr B Ching” relates this week, “today’s railway gets several times more cash in subsidy than British Rail ever did – and BR’s debt was nothing like the £25 billion Network Rail has been allowed to run up.”

The other alternative, a reformed form of purely public ownership – of both rails and mail is not on the cards, being ignored by both Compass and, naturally, the government.

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