Royal Mail: A £4bn sell-off waiting to be delivered
I know Royal Mail and the post office network are now in many senses separate, however the return of that “old friend” its proposed sell off, I suspect betokens a resurgence of post office closures.
This article explains why the sell off has returned so significantly to the current agenda: “It’s been lost in the post for a while, but Royal Mail’s £4bn privatisation project finally looks like an imminent delivery. Yesterday the group dispatched first-class half-year results to the Government’s doorstep: hitting Britons with stamp price hikes of up to 40 per cent helped Royal Mail to post a 12 per cent jump in half-year, pre-tax profit to £115m. That was despite an ongoing decline in the number of letters in the average postman’s daily sack, which fell 9 per cent to 6.8 billion in the six months to 23 September.
The service instead cashed in on its May increase in stamp prices, when the cost of a first-class stamp rose from 46p to 60p. And the company which delivers Amazon’s goods continued to benefit from surging online shopping: revenues at its parcel businesses grew 4.6 per cent to £2bn.
But a major reason for the transformation in Royal Mail’s finances has been that the Government took over its giant pension fund, which saw £28bn of assets and £38bn in liabilities transferred to the state, and meant there was no equivalent to 2010-11’s £292m deficit payment. The taxpayer got a raw deal on that transaction: a short-term boost to the country’s national accounts will trigger heavy liabilities in the future.”