Why does the Royal Mail need to make a profit?

I somehow feel that I am not the only person in Britain that would like to kick George Pascoe-Watson in the groin. I cannot stand his newspaper, I cannot stand his political views and he as a person reminds me of all the worst aspects of the media hackery. When he was on Question Time last night, I became one of those people that needlessly shouted at the TV. One of those arguements I had with the TV on QT last night was the discussion about Royal Mail, with the Plaid MP making the point that Royal Mail made a £30m profit last year - this was diametrically opposed to Mr Pascoe-Watson's view that Privatisation is Good. What everybody on the panel appeared to have missed, however, is that putting the cart before the horse rarely accomplishes anything.

The Royal Mail is a nationalised company, which concerns itself with distributing parcels and letters across the nation (up winding roads and across rivers included) in an efficient and organised way. Royal Mail also provides hundreds of outlets for collecting a pension from (say) which provide a lifeline to quite a lot of old people. It pays it's large amount of staff a decent wage, it is heavily unionized, and, overall, is not as bad as some of us consider it to be. These are the facts of the matter. Three things stick out: one, the Royal Mail is already efficient - letters get collected processed, sent across the country and delivered within 1-4 days, depending on the stamp. That's quite a bit job, and Royal Mail are quite a bit more reliable about their job than, say, DHL. Secondly, Royal Mail provide an important public service, that if compromised would damage the infrastructure of the country. Thirdly, Royal Mail employs a vocal bunch of workers. This means that the Royal Mail is a quite important part of our lives.

Why does a firm that provides a vital public service to everybody need to be pushed so hard to drive for profit? Why does the Private Sector have a magic pill that generates more money without more costs? Why do we risk worse service, higher prices and more unemployed postmen in the quest for this higher profit? In this blogger's personal opinion, profit is superfluous to service. The Royal Mail is a vital provider of public goods, and as any economist will tell you public goods are undersupplied by the private sector, because the general benefits of a public good affect society as a whole, and do not count on the business sheets of corporations. Royal Mail cannot stop delivering post and parcels - their product is non-excludable. Royal Mail does not stop other people delivering mail - their product is non-rivalled. They are a public company, striving for a public service. Lining the profits of rich businesses and making The Sun happy is irrelevant in comparison.