Rogue Mail: a demo by the Communication Workers Union against Royal Mail privatisation, October 2013
Show Hide image

The Royal Mail underselling shows this was privatisation through ideology not pragmatism

If ministers had held out for a better price, they could have raised an extra £750m.

Money is still a bit tight down at the Treasury – so any deal under which the taxpayer loses out to the tune of three quarters of a billion quid might be considered just a tad embarrassing.

That's certainly what the National Audit Office (NAO) thinks. Last October the government sold 70 per cent of the Royal Mail at a price of 330p a share. By the end of that day, those shares were already trading at 455p, and in January they hit a peak of 615p (they’ve since fallen back a bit). In other words, if ministers had held out for a better price, the sale could have fetched an extra £750m.

The watchdog’s boss, Amyas Morse, doesn’t really go in for fiery language but his comment was quietly damning nonetheless. The business department’s approach was “marked by deep caution,” he said, “the price of which was borne by the taxpayer”.

Anyone expecting ministers to be don sackcloth and ashes about all this, though, will have been sorely disappointed, and on this morning’s Today programme, the business minister Michael Fallon was utterly unrepentant. “The audit office report actually recognises that we achieved our objectives,” he explained to an increasingly exasperated Jim Naughtie. “It was the biggest privatisation for 20 years, we had to be careful about it to make sure that we got it away [and] we did get it away.”

In other words, the government was so frightened that the deal wouldn’t come off at all that it cheerfully underpriced it to make sure that it did. Fallon was basically admitting to exactly what the NAO had accused him of: privatisation was an end in itself, and we should consider ourselves lucky that the government succeeded in flogging off the family silver at all.

There are a number of reasons why a minister might favour privatisation. To raise money for other things. To outsource risk. To duck responsibility, by giving them someone else to blame.

For many on the right, though, it’s a matter of genuine faith. Services will always do better under private sector leadership, they think, because business types are clever and public servants suck. Hulking government bureaucracies are always less efficient and responsive than equally hulking corporate ones.

Never mind that most of the privatised railways are drowning in public subsidy, while the East Coast Main Line has started turning a profit since being taken back into public ownership: the latter needs to be re-privatised as quickly as possible because, well, it just does. Private good; public bad.

(There’s another view, common in some parts of the left, which states that business is inherently evil, the state inherently great, and that any move from the latter to the former will inevitably lead to the collapse of civilisation as we know it. This is, indeed, equally silly. It’s just not what I’m writing about right now, so there.)

The thing is, some privatisations were probably no bad thing. Yes, the shareholders are only interested in profits, and most corporate execs these days demand the kinds of salaries that’d enable them to turn their basement into the Batcave for a laugh. Get things right, though, and the government can use all that to its advantage, to encourage innovation, or investment, or difficult decisions for which ministers lack the guts. To go back to the railways, the lines into Marylebone station are run vastly better these days than they ever were run under British Rail. Sometimes, it can work.

But sometimes, it doesn't. Sometimes government mucks up the way it structures its contracts. And sometimes a service is just so unprofitable that the only way of ensuring it exists at all is for the taxpayer to suck it up and pay for the bloody thing.

Which side of this divide the Royal Mail privatisation will come down on is not exactly clear: cleverer people than I don’t seem to agree. But I’d be more confident about it if Michael Fallon hadn’t just suggested that the government’s goal was privatisation at any cost. Getting these things right requires careful thought and lengthy negotiation. If ministers couldn’t hold out for a better share price, then how can we believe they held out for any of that?

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

GETTY IMAGES
Show Hide image

The good, the bad and the ugly: behind the scenes of the Brexit broadcasts

Nothing feels more artificial than doing live television, and last weekend was even stranger than usual.

Nothing feels more artificial than doing live television. You sit there, isolated from the rest of the news, hair full of Elnett and face caked in something approaching yacht varnish. Then you’re expected to chat away with an anchor as if you were old mates under dazzling white lights, while seven crew members stand around watching you. Worse, everything has irony baked into it: TV now happens in the lively expectation that it will be instantly giffed, memed and stripped for parts on Twitter. It’s like eating a pre-chewed meal.

We live in such a media-literate culture that politics has the same sense of déjà vu. Its tropes are so familiar from TV programmes about politics that living through them in real-time 3D feels profoundly dissociative. You feel lost in the meta. I once asked a researcher what election night was like. “The only way in which it wasn’t like The Thick of It is that on The Thick of It no one runs around saying, ‘Oh, my God, this is just like The Thick of It!’”

Two days after the Brexit result, I went to College Green in Westminster to record a live version of BBC1’s Sunday Politics. The atmosphere on the muddy lawn, tramped by a thousand assistant producers, was suffused with overwrought importance and high absurdity. Spread out across the grass were tents – “Why don’t you sit in the news gazebo?” a producer told me – from which shell-shocked generals would occasionally emerge, ashen-faced, fresh from rallying the troops through an interview with Radio 5 Live. All it was missing were pillars of smoke, the whump of artillery and a man in a Hawaiian shirt with a cigar. Instead, we had a new shadow cabinet resignation every time we went off air for ten minutes.

That pandemonium compensated for referendum night, when all the channels were at their most sober. Inevitably, David Dimbleby was presiding over a stately galleon of a BBC show, on which things were so serious that Jeremy Vine wasn’t even allowed to dress up as a bendy banana. Over on ITV, Tom Bradby was doing his matinee idol thing (he always looks like someone playing a charming rotter in a detective drama)while Sky News had trapped Kay Burley at a series of parties where she couldn’t make anyone cry. It all reeked of gravitas.

Not so, the rest of the referendum telly. Take The Great Debate at Wembley, which BBC1 screened two nights before the vote. You know, the one that ended with Boris Johnson’s soulful invocation of “Independence Day” (never mind that many countries have an independence day and usually they’re celebrating independence from us). Between speeches from the main panel, led by Johnson and Ruth Davidson, the cameras flicked over to a second panel of people perched on those boy-band-doing-a-ballad high stools. For a moment, I thought that some form of panel Inception had occurred and there would be an infinite regression of panels, each marginally less famous than the last. In the best tradition of light entertainment, possibly the next one would have featured children who looked like Tim Farron and Priti Patel, offering faux-naive zingers.

The contest for the most surreal offering ended in a dead heat. The night before the vote, Channel 4 locked Jeremy Paxman in a room with an extraordinary collection of politicians and random Nineties celebrities. (Biggest surprise of the campaign: Peter Stringfellow is for Remain.) To put it in perspective, this was a show that Nigel Farage the attention vampire blew off. Poor old Paxman isn’t used to coping with luvvies. I thought he might throttle Sandie Shaw when he asked her about security and she started talking about “spiritism”. Someone with a cruel sense of humour should give Paxo a fluffy talk show. “TELL ME A BETTER SELF-DEPRECATING ANECDOTE FROM THE SET,” he’d thunder at Hugh Jackman. “AND BE QUICK ABOUT IT.”

The joint-weirdest bit of EU telly was ­Jeremy Corbyn’s appearance on Channel 4’s The Last Leg, a show for which the pitch was surely “Top Gear but for sports”. He turned up in a white fur coat and a Bentley for the opening gag, confessed to feeling “seven and a half out of ten” about the EU and essayed a similarly nuanced answer about whether he’d rather have a knob for a nose or a nose for a knob. “You’re really stuck on this whole binary choice thing,” he said, gnomically. Then Russell Crowe turned up to exude his usual low-level petulant menace, crushing any possibility of fun.

Having watched a huge amount of television over the campaign, I have come to five conclusions: 1) our prosperity is assured if we can patent whatever David Dimbleby’s bladder is made out of; 2) no man has ever looked sadder in victory than Michael Gove on Friday morning; 3) Ruth Davidson, Sadiq Khan and Anna Soubry should get more TV bookings; 4) the Leave campaign had so many versions of the same middle-aged, bald, white man that I began to wonder if it was a trick, like three kids in a long coat; 5) Versailles on BBC2 – full of frocks and fireplaces and men with hair like Kate Middleton – is the only thing that kept me sane.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

This article first appeared in the 30 June 2016 issue of the New Statesman, The Brexit lies