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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Richmond is a wake-up call for Labour's Brexit strategy

No one made Labour stand in Richmond Park. 

Oh, Labour Party. There was a way through.

No one made you stand in Richmond Park. You could have "struck a blow against the government", you could have shared the Lib Dem success. Instead, you lost both your dignity and your deposit. And to cap it all (Christian Wolmar, take a bow) you self-nominated for a Nobel Prize for Mansplaining.

It’s like the party strategist is locked in the bowels of HQ, endlessly looping in reverse Olivia Newton John’s "Making a Good Thing Better".

And no one can think that today marks the end of the party’s problems on Brexit.

But the thing is: there’s no need to Labour on. You can fix it.

Set the government some tests. Table some amendments: “The government shall negotiate having regard to…”

  • What would be good for our economy (boost investment, trade and jobs).
  • What would enhance fairness (help individuals and communities who have missed out over the last decades).
  • What would deliver sovereignty (magnify our democratic control over our destiny).
  • What would improve finances (what Brexit makes us better off, individually and collectively). 

And say that, if the government does not meet those tests, the Labour party will not support the Article 50 deal. You’ll take some pain today – but no matter, the general election is not for years. And if the tests are well crafted they will be easy to defend.

Then wait for the negotiations to conclude. If in 2019, Boris Johnson returns bearing cake for all, if the tests are achieved, Labour will, and rightly, support the government’s Brexit deal. There will be no second referendum. And MPs in Leave voting constituencies will bear no Brexit penalty at the polls.

But if he returns with thin gruel? If the economy has tanked, if inflation is rising and living standards have slumped, and the deficit has ballooned – what then? The only winners will be door manufacturers. Across the country they will be hard at work replacing those kicked down at constituency offices by voters demanding a fix. Labour will be joined in rejecting the deal from all across the floor: Labour will have shown the way.

Because the party reads the electorate today as wanting Brexit, it concludes it must deliver it. But, even for those who think a politician’s job is to channel the electorate, this thinking discloses an error in logic. The task is not to read the political dynamic of today. It is to position itself for the dynamic when it matters - at the next general election

And by setting some economic tests for a good Brexit, Labour can buy an option on that for free.

An earlier version of this argument appeared on Jolyon Maugham's blog Waiting For Tax.

Jolyon Maugham is a barrister who advised Ed Miliband on tax policy. He blogs at Waiting for Tax, and writes for the NS on tax and legal issues.