The Royal Mail is one of Britain’s oldest and most successful institutions.
Yes, we all have our horror stories of late deliveries and vanished parcels.
But it remains close to many ordinary people’s hearts, and few organisations have such an extraordinarily rich history.
Postmen have been plodding up and down the nation’s roads since 1516, when Henry VIII appointed the first Master of the Posts to carry royal messages from the court.
I cannot be alone in thinking there is something grotesque about Postman Pat’s much-loved employer being flogged off by a firm such as Goldman Sachs
Yet just three years from its 500th birthday, the Royal Mail is at the centre of a deeply controversial sell-off that could see speculators, hedge funds and City gamblers lining their pockets at the expense of the British taxpayer.
On Friday, the Royal Mail will be floated on the stock market for the first time, sparking one of the biggest share scrambles since the privatisations of the Eighties.
Centuries of history will come to an end, with one of the last great state monopolies becoming a private company.
The Royal Mail is one of Britain’s oldest and most successful institutions, and remains close to many people’s hearts
You might have thought the Treasury would want to make sure we get value for money.
As a state asset, built by generations over the centuries, the Royal Mail belongs to us all, so we should charge top whack for it.
But I have a horrible sinking feeling that when the shares are publicly traded for the first time on Friday, the people cashing in will be some of the City’s biggest and most disreputable profiteers.
At the root of all this is a gigantic miscalculation by the Treasury, which has grossly underestimated public demand in the sale.
Indeed, yesterday there were reports that the backlog is so great that many applications will not be processed before the deadline — which means that through no fault of their own, many would-be investors will miss out completely.
Why the Government got this so badly wrong, though, is simply beyond me — for we have been here before.
When Mrs Thatcher began selling off the family silver 30 years ago, her privatisations were carefully targeted at ordinary ‘little’ investors
When Margaret Thatcher privatised Britain’s utilities and heavy industries in the Eighties, the firms were often enormously undervalued.
Shares in British Telecom, for example, were priced so cheaply that investors doubled their money within hours.
Indeed, Lloyds’s chief economist later estimated the Treasury could have recouped an extra £3 billion for firms such as British Aerospace, British Steel and British Gas if it had sold them at the proper market value.
As a result, investors made a killing, while most economic historians agree that the British taxpayer could have got a much better deal.
The seven banks organising the sale of the Royal Mail, which include Goldman Sachs, can expect a cut worth £24 million
At the time, selling utilities at a discount made a kind of sense, because the Treasury had no idea how successful the share issues would become.
But this time the Government has no such excuse.
Official guidance suggests Royal Mail shares will cost no more than £3.30 each, thereby valuing the company at £3.3 billion.
Yet most City experts think the Royal Mail is actually worth £4.5 billion — which means that as soon as trading begins on Friday, the share price could jump to around £4.50.
The result is likely to be a bonanza, with early investors making a profit of around a third on their investment in a single day.
As David Jones, the chief strategist at the City firm IG, has said: ‘This looks like an instant windfall to everybody.’
But an instant windfall for whom? Not the Treasury, who will surely have egg on their faces. Not the British people, either, who will have lost out to the tune of around £1 billion.
No, the big winners will be the same people who always win on these occasions — the big City brokers, banks and hedge funds, which are likely to snap up most of the Royal Mail shares that are made available.
When Mrs Thatcher began selling off the family silver 30 years ago, her privatisations were carefully targeted at ordinary ‘little’ investors.
You may well remember the famous advertising campaign — ‘If you see Sid, tell him’ — which encouraged individuals to apply for British Gas shares in December 1986.
‘Popular capitalism’, as it was called, was a key element of Mrs Thatcher’s appeal.
Indeed, her privatisation drive was partly designed to give ordinary families a stake in the financial system.
This time, however, there is not even the faintest pretence of popular capitalism.
Instead, 70 per cent of the Royal Mail shares have been reserved for big institutional investors, with only 30 per cent left for ordinary punters like you or me.
Not surprisingly, the vultures are circling.
According to one financial expert, David Buik, some multinational hedge funds have applied for hundreds of millions of shares. ‘A lot of people are going to miss out,’ he said.
Let me put that another way. You and I are going to miss out.
In the meantime, the big City firms — the very people whose greed, self-indulgence and reckless irresponsibility plunged the world into crisis and sent Britain into recession — are going to fill their boots.
Deputy General Secretary of the Communications Workers Union Dave Ward (right) talks to members opposed to privatisation of the Royal Mail at Royal Mail Headquarters before delivering a petition
No wonder Labour has denounced it as a ‘bonanza for the speculators’.
As if that were not grotesque enough, the seven banks organising the sale can expect a cut worth £24 million.
Among them are some of the most controversial financial institutions on the planet, such as UBS and Goldman Sachs, which were fined millions for misleading investors during the banking crisis.
I cannot be alone in thinking there is something grotesque about Postman Pat’s much-loved employer being flogged off by a firm such as Goldman Sachs, which was fined a record £343 million for its shameless behaviour.
One observer once called Goldman’s ‘a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money’.
Do we really want that kind of company cashing in on the sale of this historic national asset?
For my part, I believe the sale is misguided. Like Mrs Thatcher, who drew the line at privatising one of Britain’s most venerable institutions, I think the Royal Mail should have remained in public hands, offering a universal service from the Home Counties to the Outer Hebrides.
Still, we are where we are. New Labour prepared the ground by slashing deliveries and staff, the momentum towards privatisation became irresistible and the Coalition found the chance of a quick buck too good to resist.
Even so, the sale makes a mockery of the gentle, conservative values that have animated the Royal Mail for much of its history.
For many of us, the nostalgic appeal of the Post Office is rooted in its ethos of public service. From mail coaches to Penny Blacks, the Royal
Mail bound Britain together, reminding us that there is more to life than fat profits for the few.
What is even worse, though, is that the sale plays so obviously into the hands of capitalism’s critics.
Five years after the financial crisis began, most British families are still feeling the pinch.
Yet now, with the share sale giving priority to City speculators, the reckless gamblers who caused the crash are being handed what is likely to be a massive windfall.
Meanwhile, thousands of ordinary investors, the very people who owned the Royal Mail for centuries, will come away empty-handed.
Little wonder, then, that so many people believe the system is irredeemably biased against them.
The fact is that the Coalition has got this badly wrong. Privatising Royal Mail at all was bad enough, but at least it could be justified if the winners were ordinary investors.
Alas, the Government seems determined to hand large stakes in one of our oldest public institutions to some of the most unscrupulous financial sharks on the planet.
That doesn’t sound like capitalism to me. It sounds more like a gigantic rip-off.