Three hundred seventy-eight years of service — that’s a long time. And yet, after that epoch, Great Britain’s Royal Mail is headed for privatization. Times have changed.
News stories can’t help but mention that this is the biggest British privatization move since the unloading of British Rail back in Margaret Thatcher’s day.
Privatization details are notoriously hard to get right. It’s not obvious what to do. But the details are important. And so is the necessity for the privatization: the mail service has shown a profit in recent years, but is prevented from further profitable avenues by capital limitations.
Only as a private company can Royal Mail avail itself of private capital markets.
Were Congress to completely untether the U.S. Postal Service in similar fashion, there would still be the live issue of protection: several classes of mail are still only allowed to the USPS. But the Royal Mail lost its monopoly back in 2006, in part to comply with EU rules. The legislation enabling its privatization was passed two years ago.
The details?
The plan is to give mail employees “10 percent of shares as part of a stock market flotation” in what Business Secretary Vince Cable swears is “the biggest employee share scheme for nearly 30 years.” Might nice — almost as generous as the Oregon owner of Bob’s Red Mill, who gave his company to his employees. It has to “go to someone,” right?
But even with Royal Mail workers being handed a 10 percent stake in the soon-to-be private enterprise, the union for the currently government workers is adamantly opposed to the move.
Who’s surprised?
This is Common Sense. I’m Paul Jacob.