So even as the crisis caused by privatisation, deregulation and ‘flexible’ labour mounts New Labour figure it best to part privatise the postal service-
The Royal Mail will be partially privatised as part of a range of measures to protect its long-term future, Lord Mandelson announced today. The business secretary said the government had already had an expression of interest from the Dutch postal company TNT and that part-privatisation was necessary to ensure the continuation of the universal postal service.
He also said the government would take on a share of the Royal Mail’s massive £7bn pension deficit. Publishing Richard Hooper’s report into the future of the Royal Mail, Mandelson said its conclusions made “sober reading” and ministers would be accepting its three key recommendations.
Hooper said the Royal Mail should form a “strategic minority partnership” with a private company, the government should take responsibility for reducing the pension deficit, and the service should be regulated by Ofcom, the communications regulator, not Postcomm, the postal services regulator.
So questions, pension deficit? Hmm how did that happen-
According to new calculations reported in telegraph.co.uk today by Independent pension consultant, John Ralfe who bases his estimate on data available from the Royal Mail’s March accounts,Royal Mail’s pension deficit could rise from £2.9bn to £5bn by the end of September. As of March the Royal Mail had pension assets of £23.9bn and liabilities of £26.8bn, giving a deficit of £2.9bn. However, by the end of September Mr Ralfe estimates the value of its assets will have fallen to approximately £21bn, with liabilities amounting to £26bn, giving a £5bn deficit.
The £23.9bn figure comprised; £11bn of equities, £10bn of bonds, property of £2.7bn and £200m held or invested elsewhere. Estimated liabilities at the end of September of £21.1bn are based on a 15pc fall in equities to £9.5bn, bonds down 10pc to £9bn, and a £200m fall in property to £2.4bn. Other investments are assumed to have remained unchanged at £200m.
The estimated figure reflects ongoing turmoil in the stockmarket, but won’t include the shares bloodbath seen earlier this month. But for the fact that the fund shifted £4bn out of equities and into bonds last year, the numbers would have been even worse. The country’s 200 largest corporate pension schemes had lost more than £45bn in value since the end of August, due to the sharp stockmarket sell-off.
So that would be the same neoliberal polices causing the deficit which in turn is reason to pursue neoliberal polices of privatisation and…deregulation, yes Royal Mail CEO Adam Crozier is a zealous disciple of the dogma-
Adam Crozier, Royal Mail’s chief executive, said the shackles needed to be lifted from the group to enable it to compete against private-sector competition, which was creaming off the lucrative business mail contracts that had traditionally supported the universal service. “We need the market to be deregulated to allow us to compete, not just against other postal companies but other communications companies. We have probably lost more direct-marketing business to Google than to [private postal operator] TNT,” he said.
Crozier said Royal Mail would not turn its back on its obligations: “The universal service is a huge asset for Royal Mail and for the nation as a whole. It is part of the fabric of our society and is vitally important both to social cohesion and to the UK economy … It is vital that we have a real debate about how the universal service can be financed.”
Now then how come those businesses could cream off the juicy contracts? Because the postal system was deregulated beginning 2006 thus allowing the creaming off to start and weaken the Royal Mail, in other words a long game of privatisation each step creating a problem that according to the church of the free market could only be solved by going further along with their plans, a neat scam. Now this big ol’ report was authored by Richard Hooper, so you’ll be reassured to know he has massive experience in the postal service, well he’s written and received letters, what more do you need?
Richard Hooper is currently Chairman of Artilium plc and a non-executive Director at YELL Group plc. He stood down as Chairman of Informa plc in May 2007. He was Deputy Chairman of the Office of Communications (Ofcom) between 2002 and 2005 and Chairman of the Radio Authority for three years until 2003. Previous directorships include non-executive director of MAI plc (1993-6), non-executive director of United News & Media (1996-7), non-executive director of Superscape plc (2000-2) and non-executive Chairman of IMS Group plc (1997-2002). He was also Director, Prestel, at Post Office Telecommunications (1980-81) and Chief Executive Value Added Systems and Services, BT (1982-86).
Mr Hooper was a founder member of the radio authority in 1991, his interests are far more diverse. After completing the BBC’s general training course he worked in radio and was one of the producers behind the launch of the Open University.
After leaving the BBC, he was involved in the creation of pre-internet electronic information service Prestel, had a stint at BT running Yellow Pages and fronted doomed pan-European satellite TV company Super Channel. He then went on to be consultant before returning to the fray proper in his role at the radio authority.
So once again we have an asked & answered consultation/report process, they already know what the end result is to be- privatisation, deregulation, they get a suitable suit to write up a report which the government than waves about as evidence of the rightness of its policies. A circular process creating a downward spiral into neoliberal oblivion that even this current crash will not deter, institutionalised as they all are by decades of orthodoxy that has until recently made them all incredibly rich even as it impoverished others. In fact that aspect- seeing the hell below them- makes them more desperate than ever to hold onto the means to stay insulated from our struggles. And it’s certainly worked for Crozier-
Royal Mail was accused of “rewarding failure” after disclosing that its chief executive, Adam Crozier, was given a 26 per cent pay rise last year, taking his total package to £1.25 million.
Despite the loss of twice-daily postal deliveries and the closure of thousands of post offices, Mr Crozier, who has just been embroiled in the worst postal strike in 20 years, received a performance bonus of £469,000. His salary was £629,000 and he had £158,000 in pension and benefits. The pay increase was almost 10 times the 2.9 per cent awarded to other staff in the year to March 2007.