The coalition aims to push through Royal Mail privatisation before strike action

In defiance of 96% of Royal Mail workers, ministers hope to complete the sell-off in advance of a nationwide strike.

The coalition has gone where even Margaret Thatcher dared not tread (she memorably remarked that she was "not prepared to have the Queen's head privatised") and fired the starting gun on the sell-off of Royal Mail. It is doing so in the face of overwhelming hostility from the public (with 67% opposed and just 20% in favour) and postal workers (96% of whom oppose the privatisation), as well as opposition from Labour, the Countryside Alliance, the Bow Group, the National Federation of Subpostmasters and the business select committee. 

The Communication Workers Union has said that it intends to ballot its members on strike action on 20 September, which could lead to a nationwide strike by 10 October. But the fear among trade unionists is that the coalition will attempt to push through the sell-off in advance of this date in order to avoid the spectacle of the government defying workers' wishes. A £3bn initial public offering is expected within weeks. 

The government has promised the 150,000 postal workers a 10% stake in the company, with shares worth up to £2,000 each, and an 8.6% pay rise over three years. But CWU general secretary Bill Hayes has rightly warned that staff will not "sell their souls" for such a stake. "Postal workers know that privatisation would mean the break-up of the company, more job losses, worse terms and conditions, and attacks on their pensions. It would be a wrecking ball to the industry they work in."

Ministers hope that the sell-off will pave the way for a revival of the popular capitalism of the 1980s and plan to launch a Tell Sid-style advertising campaign to persuade the public to buy shares. Michael Fallon spoke on the Today programme this morning of how he hopes that "millions of people" will become owners of Royal Mail. But at a minimum stake of £750 (£500 for staff) that seems rather rather Panglossian.

As Chuka Umunna has previously outlined on The Staggers, Labour opposes the sell-off on the grounds that it is an ill-timed firesale designed to help plug the £116.5bn deficit. He wrote: 

We opposed full privatisation when the government proposed it early in this parliament because we believe that maintaining the Royal Mail in public ownership gives the taxpayer an ongoing interest in the maintenance of universal postal services. It also gives us an interest in the all-important agreement the Royal Mail has with the Post Office, under which the Post Office provides Royal Mail products and services – crucial to the Post Office in the long term. Public ownership helps ensure the taxpayer shares in the upside of any modernisation and future profit that the Royal Mail delivers too.

Despite all this, the government is pressing ahead with its plans to sell off this 372-year-old institution. In so doing, it has failed to demonstrate why this is the best time to sell and why a sale this year will deliver best value for the taxpayer. Instead they are rushing headlong into privatisation without addressing fundamental outstanding issues for consumers and, in particular, the many small businesses that rely on Royal Mail services.

But the question unions will ask of Labour is "would you reverse it?" The CWU has announced that it will table a denationalisation motion at the party's conference later ths month. It states: "Conference believes privatisation will jeopardise the contribution Royal Mail makes to the national economy through the universal service obligation. Conference agrees an incoming Labour government should re-nationalise Royal Mail in the event of the coalition government actually selling the company."

Should Ed Miliband, as on other occasions, merely state that "were Labour in government now" it would not be pursuing privatisation, without outlining what the party would do in 2015, it will be harder for his party to profit from the opposition to the move. 

A Royal Mail post box in Westminster, London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Show Hide image

Geoffrey Howe dies, aged 88

Howe was Margaret Thatcher's longest serving Cabinet minister – and the man credited with precipitating her downfall.

The former Conservative chancellor Lord Howe, a key figure in the Thatcher government, has died of a suspected heart attack, his family has said. He was 88.

Geoffrey Howe was the longest-serving member of Margaret Thatcher's Cabinet, playing a key role in both her government and her downfall. Born in Port Talbot in 1926, he began his career as a lawyer, and was first elected to parliament in 1964, but lost his seat just 18 months later.

Returning as MP for Reigate in the Conservative election victory of 1970, he served in the government of Edward Heath, first as Solicitor General for England & Wales, then as a Minister of State for Trade. When Margaret Thatcher became opposition leader in 1975, she named Howe as her shadow chancellor.

He retained this brief when the party returned to government in 1979. In the controversial budget of 1981, he outlined a radical monetarist programme, abandoning then-mainstream economic thinking by attempting to rapidly tackle the deficit at a time of recession and unemployment. Following the 1983 election, he was appointed as foreign secretary, in which post he negotiated the return of Hong Kong to China.

In 1989, Thatcher demoted Howe to the position of leader of the house and deputy prime minister. And on 1 November 1990, following disagreements over Britain's relationship with Europe, he resigned from the Cabinet altogether. 

Twelve days later, in a powerful speech explaining his resignation, he attacked the prime minister's attitude to Brussels, and called on his former colleagues to "consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long".

Labour Chancellor Denis Healey once described an attack from Howe as "like being savaged by a dead sheep" - but his resignation speech is widely credited for triggering the process that led to Thatcher's downfall. Nine days later, her premiership was over.

Howe retired from the Commons in 1992, and was made a life peer as Baron Howe of Aberavon. He later said that his resignation speech "was not intended as a challenge, it was intended as a way of summarising the importance of Europe". 

Nonetheless, he added: "I am sure that, without [Thatcher's] resignation, we would not have won the 1992 election... If there had been a Labour government from 1992 onwards, New Labour would never have been born."

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.