Royal Mail sale to Czech billionaire - why not blocked?

[JagLover]

Murph7355 said:

I generally agree.

For properly strategic assets I think there need to be more checks and balances... But don't see the PO or RM as either tbh.

This basically

In terms of absolutely essential post, many documents are now switching to E-signatures and it is hard to get that worked up about the remainder, which could be sent by courier if absolutely essential.

Bills and bank statements are moving online and it is a dying industry that will be mostly gone soon.

[Dagnir]

Because the government wouldn't even recognise the concept of national pride if it shot them in the face with a Lee Enfield...

[Jim the Sunderer]

Expect buildings sold and rented back to them, enormous debt taken to pay out dividends and any other assets stripped.

Like that lobster restaurant chain over in the US.

[Hill92]

skwdenyer said:

Hill92 said:

The pension situation is more complex than just assuming the net pension liability at the time of privatisation. Successive governments contributed to the net liability over the years: from swapping the pension assets for notional IOUs in the 1970s to 1990s tax rules that limited pension assets to 110% of pension liabilities while simultaneously using Royal Mail as a cash cow for Treasury coffers.

That last point also contributed to the failure invest in modernisation in public ownership. The Treasury set ever increasing negative External Financing Limits which required Royal Mail to hand over cash regardless of business needs or even profits to support the payments. Even as the letter business continued to decline there was still government interference in attempts to modernise the business. It's one of those businesses that really cannot afford to be managed by whatever wins/loses the most votes for a government minister.

As regards Government direction, the approach taken with POL - holding shares through an executive agency - seems the most sensible, and doubtless would have been pursued had RM remained in public ownership. In such a structure, RM could have accessed private borrowing had it been necessary.

The General Post Office was a department of state until the Post Office Act 1969 turned it into a statutory corporation. Post Office Counters Limited was incorporated as a subsidiary under the Companies Act in 1987. Royal Mail ceased to be a statutory corporation when it was reincorporated as Consignia plc in 2001. Both businesses were being run as companies owned by the government long before privatisation.

They couldn't just borrow externally under public ownership because any borrowings would be treated as part of the public sector net debt. And the Treasury has always had more pressing ways to allocate its self-imposed PSND funding limits.

HM Government has never been a benevolent shareholder in Royal Mail.

[skwdenyer]

Hill92 said:

skwdenyer said:

Hill92 said:

The pension situation is more complex than just assuming the net pension liability at the time of privatisation. Successive governments contributed to the net liability over the years: from swapping the pension assets for notional IOUs in the 1970s to 1990s tax rules that limited pension assets to 110% of pension liabilities while simultaneously using Royal Mail as a cash cow for Treasury coffers.

That last point also contributed to the failure invest in modernisation in public ownership. The Treasury set ever increasing negative External Financing Limits which required Royal Mail to hand over cash regardless of business needs or even profits to support the payments. Even as the letter business continued to decline there was still government interference in attempts to modernise the business. It's one of those businesses that really cannot afford to be managed by whatever wins/loses the most votes for a government minister.

As regards Government direction, the approach taken with POL - holding shares through an executive agency - seems the most sensible, and doubtless would have been pursued had RM remained in public ownership. In such a structure, RM could have accessed private borrowing had it been necessary.

The General Post Office was a department of state until the Post Office Act 1969 turned it into a statutory corporation. Post Office Counters Limited was incorporated as a subsidiary under the Companies Act in 1987. Royal Mail ceased to be a statutory corporation when it was reincorporated as Consignia plc in 2001. Both businesses were being run as companies owned by the government long before privatisation.

They couldn't just borrow externally under public ownership because any borrowings would be treated as part of the public sector net debt. And the Treasury has always had more pressing ways to allocate its self-imposed PSND funding limits.

HM Government has never been a benevolent shareholder in Royal Mail.

As we've seen, they didn't need to borrow. They paid out cash to HMG, then had to beg for funding from HMG. They had/have enormous under-utilised property assets. And there was nothing to stop JVs, partial privatisation (the DHL model), and so on.

[beko1987]

glazbagun said:

Sell it, then start a new publiclyowned postal service called British Mail.

Whistl tried a decade ago, but RM used some anti-competitive practises to kill that off, and nothing has come along to match it since. Maybe Evri will buy the final mile service from the new owners and have a go with it themselves until they mess it up and fully finish it 🤷‍♂️