It doesn’t take a political genius to look a year a head and see a Britain painted Tory blue. It’s almost inevitable. The Government’s loss on the Commons Vote for the Gurkha’s was a big dent in the authority of the Prime Minister, but it could of course get worse very quickly.
The Business Secretary Peter Mandelson, in early 2009 announced plans to sell 30% of Royal Mail, opening the PLC to private investment, but ultimately leaving the Postal Service in Public hands. In 2006, the Postal market was opened up and Royal Mail quickly lost it’s monopoly, which meant that it’s losses increased from £10m in 2006, to £279m in 2007 whilst at the same time paying out obscene bonuses whilst thousands of post offices across the Country were closed down. It doesn’t help matters that billions of pounds of profit that Royal Mail has produced over the past twenty years, has been handed over to the Treasury, and so not reinvested in modernising the postal service. Short of any private investment, in order to keep up with the market, Royal Mail is doomed; it must modernise, the Government should not give in to backbench Labour MPs on this, unless those MPs offer a better option. Because perhaps selling such a huge stake in the business is the wrong move.
Compass, the left wing think tank put forward a report outlining proposals to run Royal Mail in the same way that Network Rail is currently run, as a non-profit company, which benefits from public and private investment, much like the BBC. Network Rail is responsible for the railway lines, signals, lights and rail station safety. It is there purely for the public well being, not for profit. Any profit made, is reinvested in key infrastructure improvements and new technology, not huge pay packets and bonuses. Railtrack failed because it needed huge investment over a long period, which was detrimental to the private interests of shareholders searching for quick short term profit. And so Railtrack, the private company failed and became Network Rail, which happens to be stronger, and more reliable than it’s Private predecessor.
These plans have appeared to quell dissent among back bench Labour MPs, but this morning, Number 10 rejected Compass’ suggestions, and chose instead to stick to their original plans to part privatise the Royal Mail. And whilst the majority of the British Public certainly do not want to see Royal Mail in Private hands, I think we’d all agree that something needs to be done to modernise and bring the standard of the service Royal Mail offers, into the 21st Century. Royal Mail charges some of the lowest rates in Europe. It’s large losses come primarily down to it’s huge pensions deficit, which unless sorted, will keep the entire organisation in dire financial mess. And whilst the pensions issue may be sorted out via Privatisation, I cannot imagine the low prices would continue in Private hands. We’d all suffer.
The Government is likely to win a vote in commons, but only with backing from the Tories, who always welcome Privatisation of any form. It means further embarrassment for Gordon Brown; undermining his authority much deeper than already achieved, given that he cannot rely on the backbenchers in his own party to vote in line with the Government’s proposals, and that he, in essence, will be saved by the Tories. But this in itself creates problems for the wider Labour Party, and Royal Mail. The Communication Workers Union (The Post Office Union), can either now show support for Government plans to sell 30% of Royal Mail to private investment, despite the fact that they quite clearly do not like the idea, or they could oppose the Government through Labour Backbenchers, further undermining the Government, leading to a Tory victory in a General Election, and then deal with the fact that under a Conservative Government, there isn’t likely to be a publicly owned Postal Service come the end of the term in power, along with much less influence from the Union itself. The Union, if it wishes to keep Royal Mail in public hands (which I support), must offer a way forward other than just opposition for the sake of opposition to privatisation. It an iconic British service, based on people, not profit.
The Compass Report: Modernisation by Consent, quite rightly echoes my sentiments on Royal Mail Privatisation, by stating:
“The experience of the banking sector shows where this can lead.We don’t want to be back in a few years’ time with a campaign to halt the bonus culture of the new bosses of a privatised mail service. We don’t want to have to campaign against price increases and branch closures or against job losses and worsening terms and conditions for the postal workers onwhoma great service depends.We don’twant to have to demand awindfall tax on the excess profits of the newowners, only to be told that they are registered abroad and don’t have to pay any tax at all.”
Price increases, excessive bonus culture, profiteering at the expense of the general public, and branch closures are not the way of the Royal Mail we all love. There is much need for A model in which the future of the management and the Union is not focused purely on pay disputes and working conditions, but on working together to ensure investment in infrastructure and technology is guided correctly in line with the direction of the service, rather than lining the golden pockets of shareholders. I fear this argument is merely academic given the future of the service when placed in Conservative hands. However, if it is to remain a public service, if we are to put up an argument for future Conservative privatisation, the service must put an end to it’s pensions deficit, it must offer new investment opportunities, and it must prove that the Royal Mail is not a dying Socialist entity.
Sort the Pensions Deficit, and you’ve sorted the bulk of the financing problems of Royal Mail. One of the plans Mandelson has included in these privatisation proposals, is for the responsibility of the pension fund to move to taxpayers. Which is around £6bn. I cannot understand why the Government expects the public to support privatisation, to support the idea that a wealthy individual can profit, whilst the taxpayer loses. How have we been able to pay the huge deficits racked up by irresponsible PRIVATE banks, yet we cannot afford to pay the much needed £6bn into the pension pots of public service workers? By doing this, by paying off the massive pension deficit, the first step to reinventing the Royal Mail, preparing it for modernisation and much needed investment begins…without the need for any privatisation.
And although part Privatisation appears to be a quick and easy answer, it will only create more problems then it solves, leading, I fear, to full privatisation come the Tories grip on power, ending in a poor service for the majority and a great service for the wealthy few, owned by a faceless overly rich businessman. I cannot think of anything I like the sound of less.
We’d all miss the iconic red box.