“A single purpose company with no shareholders and that is run solely for the benefit of customers”.
This to me sounds exactly like what a privatised Royal Mail should be. The sentence is taken from the website of Glas Cymru/ Welsh Water and describes how they have operated since 2000. I have already suggested to Vince Cable when questioning him in the Commons that this be the kind of business model taken on by Royal Mail. It is perfectly compatible with the Tory-Lib Dem Postal Services Act and successfully combines social obligations and commercial imperatives. There is nothing that I can see in the legislation that would prevent it from establishing an alternative company structure such as a Company Limited by Guarantee that was used by Network Rail and Welsh Water.
On top of which, such a model would raise capital more cheaply, without contributing to Government debt. As a “not for profit” company, all Welsh Water’s financial surpluses are reinvested in the business. Welsh Water has the highest credit rating in the sector which enables it to borrow money cheaply to finance investment. Welsh Water find it cheaper to raise capital because they are not caught up in the usual speculator driven, takeover vulnerable, merry-go-round. And under the terms of its licence Glas Cymru may not operate in sectors other than water, just as Royal Mail would be restricted in its operations.
There is no public appetite for privatisation and there is certainly not appetite for it among Royal Mail employees. In fact a July YouGov poll showed that 67% of the public are opposed to privatisation of Royal Mail and only half of the remaining 40 per cent actually support it. The public fears price rises and a less efficient service. Welsh Water has made a success of its service and kept prices relatively reasonable because profit is not the driving force. It also has a good record on investment and customer service.
Definitely a model that Labour should pledge to implement in our election manifesto.
A Royal Mail for the Public
Mr Peter Hain (Neath) (Lab): Why does the Secretary of State not consider the kind of business model used by Welsh Water, which the Library has advised me is perfectly compatible with the Act, which successfully combines social obligations and commercial imperatives and raises capital more cheaply without contributing to Government debt? A survey by the Tory Bow Group shows that 67% of the public oppose privatisation, as do 96% of the work force. Why does he not stop dogmatically pursuing a flotation and instead adopt that positive, popular and viable alternative?
Vince Cable: There is a long and complex debate about how water companies are operated. Of course, they have extremely high gearing because of the nature of their business and do not require anything like the same level of equity. We have a model that combines the best use of equity markets and the level of debt that the company will need to finance its future investment.
MP for Neath Peter Hain is encouraging budding young artists in his constituency to enter the Royal Mail’s Christmas Children’s Stamp Art Competition 2013, which is now open. The competition, which is for primary school children aged 4-11, will see one winner’s design on a first class stamp and another on a second class stamp.
Mr Hain says, ‘This is an exciting opportunity that would allow two lucky children to send their Christmas cards this year using stamps that they have designed themselves.’
The theme of the competition is ‘What does the Christmas season mean to you?’ and designs can be religious or secular. Schools and parents of home-schooled children can sign-up to the competition online or by returning the postcard in a resource park sent to them by iChild, the online educational resource centre, in association with Royal Mail. Applications for the resource packs will be sent out on a first come first served basis and entries must be received by 19th July.
Full details of the competition, including how to enter, can be found on the Royal Mail website at www.royalmail.com/designastamp. The competition winners will be announced in September and the stamps will be available to but in all Post Offices from 5th November.
Neath MP Peter Hain has renewed his appeal to the Royal Mail, in a letter to Chief executive Moya Greene, to invest in a state of the art delivery office facility in the heart of Neath following postal bosses’ announcement early in the year that they were considering switching the work of the current delivery office in Windsor Road, Neath Town Centre to Llansamlet, Swansea, with the loss of 70 jobs.
His call comes after Mr Hain had initiated months of negotiations between Royal Mail, Neath Port Talbot County Council and the Welsh Government. This week he was told by the Welsh Government the Royal Mail was not eligible for such grant assistance to build a new office. Describing the development as ‘intensely disappointing’, he vowed to continue to fight for the delivery office to remain in Neath.
Mr Hain commented, ‘This is an extremely disappointing outcome but the opportunity is still not lost which is why I am renewing my appeal to the Royal Mail to invest in the site and secure the future of the Neath delivery office. In doing so they will be secure the quality jobs of more than 70 staff that already work out of the Windsor Road office and the vital local knowledge they bring to the job.
‘A delivery office should be located within the community it serves so that postmen and post women know their local areas and people very well. Whilst everyone agrees that the current old office is no longer fit for purpose there genuinely is a fantastic opportunity to have a purpose built facility with excellent transport links in the town. This opportunity must not be lost. Losing good jobs like this would be a body blow to Neath town.”
‘Neath Port Talbot leaders and officials have worked hard to identify a suitable site and have indicated they will help in whatever way they can to keep the jobs in Neath. But now the Welsh Government has stated the project does not fit the rules for grant assistance, responsibility passes to the Royal Mail to fulfil its historic role in Neath. I am pressing it very hard to do so.’
In July Mr Hain met with Royal Mail representatives and those from Neath Port Talbot County Borough Council to identify a suitable site in Neath town.