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.

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Debunking Boris Johnson's claim that energy bills will be lower if we leave the EU

Why the Brexiteers' energy policy is less power to the people and more electric shock.

Boris Johnson and Michael Gove have promised that they will end VAT on domestic energy bills if the country votes to leave in the EU referendum. This would save Britain £2bn, or "over £60" per household, they claimed in The Sun this morning.

They are right that this is not something that could be done without leaving the Union. But is such a promise responsible? Might Brexit in fact cost us much more in increased energy bills than an end to VAT could ever hope to save? Quite probably.

Let’s do the maths...

In 2014, the latest year for which figures are available, the UK imported 46 per cent of our total energy supply. Over 20 other countries helped us keep our lights on, from Russian coal to Norwegian gas. And according to Energy Secretary Amber Rudd, this trend is only set to continue (regardless of the potential for domestic fracking), thanks to our declining reserves of North Sea gas and oil.


Click to enlarge.

The reliance on imports makes the UK highly vulnerable to fluctuations in the value of the pound: the lower its value, the more we have to pay for anything we import. This is a situation that could spell disaster in the case of a Brexit, with the Treasury estimating that a vote to leave could cause the pound to fall by 12 per cent.

So what does this mean for our energy bills? According to December’s figures from the Office of National Statistics, the average UK household spends £25.80 a week on gas, electricity and other fuels, which adds up to £35.7bn a year across the UK. And if roughly 45 per cent (£16.4bn) of that amount is based on imports, then a devaluation of the pound could cause their cost to rise 12 per cent – to £18.4bn.

This would represent a 5.6 per cent increase in our total spending on domestic energy, bringing the annual cost up to £37.7bn, and resulting in a £75 a year rise per average household. That’s £11 more than the Brexiteers have promised removing VAT would reduce bills by. 

This is a rough estimate – and adjustments would have to be made to account for the varying exchange rates of the countries we trade with, as well as the proportion of the energy imports that are allocated to domestic use – but it makes a start at holding Johnson and Gove’s latest figures to account.

Here are five other ways in which leaving the EU could risk soaring energy prices:

We would have less control over EU energy policy

A new report from Chatham House argues that the deeply integrated nature of the UK’s energy system means that we couldn’t simply switch-off the  relationship with the EU. “It would be neither possible nor desirable to ‘unplug’ the UK from Europe’s energy networks,” they argue. “A degree of continued adherence to EU market, environmental and governance rules would be inevitable.”

Exclusion from Europe’s Internal Energy Market could have a long-term negative impact

Secretary of State for Energy and Climate Change Amber Rudd said that a Brexit was likely to produce an “electric shock” for UK energy customers – with costs spiralling upwards “by at least half a billion pounds a year”. This claim was based on Vivid Economic’s report for the National Grid, which warned that if Britain was excluded from the IEM, the potential impact “could be up to £500m per year by the early 2020s”.

Brexit could make our energy supply less secure

Rudd has also stressed  the risks to energy security that a vote to Leave could entail. In a speech made last Thursday, she pointed her finger particularly in the direction of Vladamir Putin and his ability to bloc gas supplies to the UK: “As a bloc of 500 million people we have the power to force Putin’s hand. We can coordinate our response to a crisis.”

It could also choke investment into British energy infrastructure

£45bn was invested in Britain’s energy system from elsewhere in the EU in 2014. But the German industrial conglomerate Siemens, who makes hundreds of the turbines used the UK’s offshore windfarms, has warned that Brexit “could make the UK a less attractive place to do business”.

Petrol costs would also rise

The AA has warned that leaving the EU could cause petrol prices to rise by as much 19p a litre. That’s an extra £10 every time you fill up the family car. More cautious estimates, such as that from the RAC, still see pump prices rising by £2 per tank.

The EU is an invaluable ally in the fight against Climate Change

At a speech at a solar farm in Lincolnshire last Friday, Jeremy Corbyn argued that the need for co-orinated energy policy is now greater than ever “Climate change is one of the greatest fights of our generation and, at a time when the Government has scrapped funding for green projects, it is vital that we remain in the EU so we can keep accessing valuable funding streams to protect our environment.”

Corbyn’s statement builds upon those made by Green Party MEP, Keith Taylor, whose consultations with research groups have stressed the importance of maintaining the EU’s energy efficiency directive: “Outside the EU, the government’s zeal for deregulation will put a kibosh on the progress made on energy efficiency in Britain.”

India Bourke is the New Statesman's editorial assistant.