Tag Archives: private sector

Enterprise Minister Jim Mather challenges Alan Reid MP to say where he stands on part-privatisation of the Post Office

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Argyll’s MSP and Enterprise Minister, Jim Mather has fired a range-finding shot at Alan Reid MP, Argyll’s representative at Westminster. He has effectively challenged Mr Reid to come out and say exactly where he stands on the issue of the UK Government’s determination to part privatise the Post Office.

For Argyll has already reported on a significant contradiction in Mr Reid’s behaviour. He has been active in making supportive statements of Post Offices in the fastness of Argyll from where news of his words is unlikely to get back to Westminster. He has not, however, yet signed the Early Day Motion lodged at Westminster by Labour MP Geraldine Smith, opposing the planned privatisation.

Mr Mather now says: ‘I am surprised at the lack of public response from Labour and LibDem sources in Argyll & Bute to what is a genuine threat of privatisation to a vital public utility.

‘Some weeks ago there was a great deal of furore raised about legislative proposals to lease a part of the Forest Estate to private operators and the unions and political opponents were quick to suggest that this was some form of privatisation. We are in the process of arranging a local public meeting that will enable the very newly appointed Minister for the Environment, Roseanna Cunningham, MSP,  to elaborate on what is proposed,  to rebut misrepresentations and to explain how the consultation process will contribute to the debate.

‘In the case of the Westminster Government’s plans for the privatisation of part of the Royal Mail business no such  debate is envisaged and there could be no mistaking the intentions of Lord Mandelson of Foy when he introduced the proposals in the House of Lords.

‘Far from any scrutiny from the elected chamber of the House of Commons far less a local public meeting, the stark facts were spelled out. The effect that this will have on rural mail services and the preservation of the Universal Service Obligation can all too easily be projected. We can be confident that the private operators will be much more interested in delivering mail to Derby than to Dervaig and to Colchester rather than Colonsay’.

With forest leasing and Royal Mail privatisation polarising opinion, Mike MacKenzie offers some balanced thinking

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‘Nothing is either good or bad but thinking makes it so.’ (William Shakespeare)

The recent Scottish Government consultation on the forestry provisions within the Climate Change Bill have been largely welcomed except for some fears expressed about the proposals to lease around 25% of the forest estate to private companies. Understandably some people have reservations because the term ‘privatisation’ has earned such negative connotations although what is intended is to sell off leases rather than outright privatisation.

The Westminster Government’s plans to part privatise the Post Office again touch this raw nerve although here the worst fears of both politicians and people are merited. Privatisation of public utilities has been very profitable for some, at the expense of the public and of quality of service, and most people see this as the start of a slippery slope where the Post Office is cherry picked for profitable activities.

Both of these issues are important for Argyll and Bute but they are also part of a wider debate about public versus private. In Scotland the PFI flagship was the new Edinburgh Royal Infirmary. This should have cost £180million but under PFI will end up costing the taxpayer more than £1 billion. It is important that we find alternative funding methods for such projects that offer better value.

Private procurement of public projects and of service delivery seems to be characterised by inordinate profits and greed whereas public procurement is often beset by delays, cost over-runs and inefficiencies. In truth neither one is good nor bad, although for Scottish sensibilities, public provision of monopolistic services somehow sits more comfortably.

This is reflected in Professor Allyson Pollack, the leading campaigner against NHS privatisation, having moved from England to Scotland where the creeping privatisation of the NHS has not progressed so far. She feels the battle has been lost in England but may yet be won in Scotland.

The emerging ethos of ethical business has been given fresh impetus as we have seen what damage a banking system bent on inordinate profits has done, both to themselves and to the economy. Private business can at times be more innovative and less risk averse than the public sector but a place remains for public provision and procurement especially where a monopoly exists or where the democratic ideals of equality of service are otherwise impossible to provide.

This is why public sector reform is so important. If we are to continue to afford public services they must be modern, streamlined, efficient and customer focussed.

Allyson Pollack is quite correct to discern a different set of values in Scotland, forged as they were by both Adam Smith and Robert Burns. First Minister, Alex Salmond, expresses this as ‘soft hearts and hard heads’ and having both, we know just where, in this middle ground between public and private, we ought to be.

Mike Mackenzie is one of the Prospective Westminster Parliamentary Candidates for Argyll and Bute

Will Brown now introduce the stocks as the latest PR decoy from his management of the economy?

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The UK Government announced last night – wait for it – that it is to print leaflets with details of minor court judgments and then bombard localities with these things to name and shame the culprits. Presumably this is to provide guaranteed income for the private sector businesses to whom 30% of the Post Office is to be sold?

The argument is that local newspapres have largely stopped printing the details of local court reports – not in Argyll – and that petty criminals respond more to this naming and shaming in their home areas than they do to imprisonment. That argument however, is not backed up by what would have been a logical parallel move – to cut jail sentences whose ineffectiveness would be replaced by state-controlled naming and shaming.

No mention of the enviromental costs of paper production for this stunt. No mention of the cost to the taxpayer of distribution costs – at a time when we’re in hock to the tune of £2 trillion thanks to the unregulated banks. And no mention of using the Internet – which is the obvious option in today’s communications: fast, cheap, universally available.

It’s a short hop from papering the country with more junk mail to next week’s whizzy announcement that naming and shaming is to be upgraded by the reinroduction of the stocks – vinegar-soaked sponges provided free, courtesy of you and me.

But hey, as we clear the junk mail from our halls it won’t half take our minds off that £2 trillion debt Prudence (did we ever seriously call him that?) has got us into. Not.

Mather takes Mandelson to task for holding Thursday’s debate on the part-privatisation of the Post Office in the House of Lords

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Post Office Post BoxArgyll’s MSP and Enterprise Minister, Jim Mather has taken issue with Lord Mandelson for lack of courage in choosing the House of Lords as the venue for the debate on the highly controversial proposal to part-privatise the Post Office.

By this afternoon it was known that 125 Labour MPs have signed a paper objecting to the proposal and the debate normally taking place in the Commons would have been a heated affair. The Lords has often shown that it can be a doughty defender of rights but it’s demeanour in so doing is of a gentler order than is the case in the Commons.

It is virtually certain that Gordon Brown will need support from the Conservatives to get this proposal through the vote in the Commons.

Labour MP, Kate Hoey, the former Sports Minister, has said publicly that the Government has got reform of the Post Office consistently wrong. Her point is that private sector businesses were allowed to compete with the Post Office in the delivery of selected services. She sees this as having left the profitable services to be cherry picked and the core Post Office with little but massive obligations and no real earning capacity.

Post Office CEO, Adam Crozier, told MPs that the Post Office does not have the money to invest in development and is crushed by a huge pension burden.

Union Leaders are making the valid point that the UK Government has been willing to commit the taxpayer to £1.5 trillion of debt to bail out the banks and that it is hard to see why it cannot find the will to finance the development of the Post Office.

Jim Mather condemns the UK Government’s decision: ‘to hive off a proportion of it (the Post Office), reportedly as much as 30% of its core and doubtless most profitable business, to competitors who have in recent years been encouraged to compete on unequal terms with Royal Mail.

‘What is at stake here for Royal Mail customers in Scotland and in rural areas across the land is the fear that this will mean the end of the universal service obligation if the company is privatised. Suggestions that competition will improve services cut little ice when the delivery of mail to small and isolated communities is on the agenda and yet these are the very customers who most rely on the principle of the service obligation.

‘Privatisation of Royal Mail makes little sense and can only lead on to the continued diminution of the overall service.

‘Strong concern too is expressed at the choice of the House of Lords to launch this dubious exercise. Such a matter of importance should come under the immediate scrutiny of the elected chamber rather than in the rarefied atmosphere of the unelected Lords. It is all too clear that the government are trying to avoid confrontation at this stage of the legislation but the master of New Labour spin must be accountable to the Commons in this matter.

‘I am interested in the attitude of the LibDems on this particular issue. The local MP has been vocal in his support for the retention and protection of the Royal Mail but it would appear that some of his colleagues down south are enthusiastic supporters of the concept of privatisation’.

Mr Mather’s colleague in Argyll, Mike Mackenzie, looking beyond the purely functional, has an almost poetic view of the role of the Post Office, reminding us not to take our eyes off the bigger picture. He says: ‘The Post Office was one of the fundamental planks of a modern democracy, binding us together and connecting us through one of the few truly benign agencies of Government. Little wonder that this great institution is so close to peoples hearts, especially in rural areas like Argyll and Bute, where distances and geography are still challenges’.

The photograph above, of a Post Office Post Box, is reproduced here under the GNU Free Documentation licence.

RBS restructuring may lose 20,000 jobs as Brown prepares to print money and insure toxic debt

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Stephen Hester, the new CEO of the Royal Bank of Scotland is dividing the bank into two main elements – today’s core business which is profitable and will carry on; and a peripheral cluster of ‘assets’ which will be sold as soon as buyers can be found. These ‘assets’ are the £300 billion debts – mostly toxic – acquired during the disastrous investment banking adventures that have brought the bank low.

Hester needs to show his shareholders that the heart of the RBS can succeed. Splitting the structure in this way means that he can point to one and try progressively to dispose of the other.

The identification of assets to be put up in a fire sale will inevitably mean job losses and industry experts are predicting that these may run to 20,000.

This news comes as Gordon Brown announces a plan to spend £500 billion in insuring the so-called toxic debt acquired by UK banks while at the same time pumping £15 billion, much of it new money, into the mortgage market by 2011 via Northern Rock. This is being done in an attempt to reverse the movement of the economy towards a settled recession.

Experts predixct that this move will itself create a twin track mortgage market, even within Northern Rock itself. Current mortage holders will continue to face repossession while new mortgagees will see much more favourable terms under the proposed injection of ‘new Government money’.

The national debt is now at a frightening level. Last week it was independently estimated by the Office of National Statistics at £2 trillion, when the value of the banks’ toxic debts are included.

Brown’s latest gamble – in insuring these debts and in going for what is called ‘quantitative easing’ – or printing money, as it is less ambiguously known to most of us – is also frightening. It may be too little too late.

On the one hand the UK is borrowing on an unimaginable scale and one which will bring real and widespread pain in the repaying.

On the other hand, Brown’s response pattern from the start of the collapse of the banking system has been to do as little as possible and to leave that until he had no alternative.

This means that none of the moves to date – however much they have cost us – have achieved the necessary stabilisation of the economy. From the reluctant, progressive upgrading of the bank guarantees to savers onwards, each move has been too small, too late and too indecisive. In effect, it has largely been wasted money.

Since early last Autumn when the financial industry began to unravel, there has been an argument that Brown’s best strategy was to make an early, large and bold move. But that is not his character.

The real nightmare is that the current massive debt will be our long term burden without achieving anything significant. It has been accumulated progressively, in fire-fighting dribs and drabs, each of which has vanished without impact.

However mad it seems, printing money might work in hands other than Brown’s but, with his track record throughout this crisis, hope that he might get this right would fly in the face of the evidence.

Brown has also set his face openly against a course recommended by many experts – dividing banking into two functions: the normal high-street retail banking and the high risk investment banking sector. The decision to carry on with the current twin-function banks will leave the taxpayer, now the owner of so much of the UK’s banking stock, liable for the risk-taking sector which could otherwise be hived off as purely private sector ventures.

Comment from Environment Minister, Michael Russell MSP, on political scaremongering on forest leasing scheme

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For Argyll has reported several times on uninformed and irresponsible political scaremongering on the Scottish Government’s forest leasing proposals. The latest example of this – and the subject of a very recent report – was unfortunately perpetrated by former Argyll & Bute MSP, George Lyon at the opening of his campaign to go to Brussels as an MEP.

Michael Russell has now himself sent For Argyll a comment on this matter – and please note his invitation to put forward any suggestions and ideas which you think would improve the proposed scheme.

Mr Russell says:

‘The Liberal Democrat  campaign of disinformation about the forestry proposals is now a matter of serious concern. People have a right to expect their elected representatives and their potential candidates to tell the truth but alas on this occasion the Liberal Democrats have preferred to peddle downright lies.

‘I suspect it will rebound upon them but for any party – or any individual – to seek a few extra votes by means of deliberate deceit is a disgrace to democracy.   And when the issue goes to the heart of the greatest challenge facing humanity – that of climate change – then most of us will only have contempt for such people.

‘I  remain open to all views on the forestry proposals, including ideas that can improve upon them or present viable alternatives.   All I ask is that such a debate is conducted using fact, not fiction. On that criteria the Liberal Democrats have excluded themselves from the discussion’.

Today’s Scotsman carried a factual piece underlining just how falsely based is the convenient alarmism of the moment.

It reminds us that Scotland has 1.1 million acres of state-owned forest (460,000 hectares), making the ninety year-old Forestry Commission Scotland biggest landowner. It needs an annual subsidy of £28million, some of which is used for non-commercial activities, leaving the forest estates still losing millions of pounds each year.

The Scotsman goes on to say that Jim Hume, the Lib Dem’s Environment Spokesman, has implied that:

  • local businesses will lose contracts
  • outdoor activities the Forestry Commission supports will be stopped
  • hundreds of jobs will be at risk
  • Forestry Commission Scotland’s income will be ‘severely diminished’

- all if state forests – 25% of them – are leased to the private sector.

The Scotsman dismisses such alarmism as ‘grossly misplaced’. It points out that virtually all facilities made available to the public in the forests could be safeguarded in the terms of the lease – and Michael Russell has guaranteed that they will be.

In fact such facilities cannot be other than safeguarded since they are all certified under the UK’s Woodland Assurance Scheme. This deals with issues like the provision of local employment, public access, biodiversity and health and safety.

As the Scotsman says and as For Argyll has ponted out on many occasions, it is only the taxpayer-funded annual subsidy which will be ‘severely diminished’.