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9 September 2008updated 22 Oct 2020 3:55pm

No dogma like old dogma

They keep on trying to privatise and it's time for the public to prevent asset strippers from acquir

By Billy Hayes

Today’s session at Congress will see the CWU move its motion opposing the privatisation of Royal Mail.

Governments may come and go, yet for the past 20 years there’s always been some bright spark proposing to flog it off.

The CWU has already gone through the experience of seeing off pamphlets by the Adam Smith Institute, a Parliamentary Bill from Michael Heseltine, then President of the DTI, in the early 1990s.

We have also gone through the experience of Patricia Hewitt at the DTI trying to sell off Royal Mail to the privatised Dutch Post Office through a joint venture, circa 2001. All very hush hush at the time. And all very unsuccessful.

More recently, we’ve endured Royal Mail management lobbying the Labour Government from 2004 to 2007 to have shares distributed to the staff, and through a Stock Market sale. That effort ended, following the CWU counter-campaigning, when Alistair Darling as DTI Minister rejected management’s proposals in January 2007.

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Still, there is no dogma like an old dogma. So now we witness its revival through the medium of the Government-convened Hooper Review of the liberalisation of the postal sector.

Earlier on this year, both the industries regulator Postcomm and Royal Mail management, submitted proposals to the review team for the privatisation of Royal Mail. Postcomm went further, and called for the privatisation and service break up of Royal Mail.

It must be difficult for management to resist the call of privatisation. All those fat share options; all that freedom from anything other than the commercial considerations – how could any public sector manager resist the temptation to become a private entrepreneur?

Particularly, as this allows you to cover-up the fact that for the past four years you failed to prepare Royal Mail for the challenge of competition; failed to deliver an innovative strategy; and refused to identify a role for the industry as a public service in the country’s future.

Postcomm’s support for privatisation is even more galling. After all, earlier this year Hooper’s interim report demonstrated that Postcomm’s management of liberalisation in the mail market had failed to deliver any benefit for the majority of customers.

But Postcomm’s policy had created a financial crisis for Royal Mail.

Postcomm’s policy had resulted in a position whereby 40 per cent of Royal Mail’s most profitable bulk mail was now being part-processed and trunked by the competitors under arrangement to have “access” to Royal Mail’s network.

Yet 99.8% of addressed letters are still being delivered by Royal Mail. This huge imbalance is a simple product of a system whereby Royal Mail in reality subsidised the competition to provide a partial, and hardly innovative, alternative.

Postcomm has blundered away the value of Royal Mail’s economies of scale and scope. In its place, an artificial and parasitic competition exists alongside a financially weakened Royal Mail.

Time for the cover-up then. Hence Postcomm’s proposal to resolve the problems through privatisation and break-up of the industry.

Hooper’s Report is likely to be published shortly after the Labour Party Conference. The CWU believes the atmosphere around the report is unhealthy.

There is a strong possibility that Hooper will support privatisation. This may well take the form of a joint venture with TNT, Deutche Poste, Fed Ex, or some other private equity arrangement.

A joint venture would not require primary legislation in Parliament.

Such a privatisation would almost certainly entail the start of the break-up of Royal Mail. The loss making Post Office Network would have to be subsidised by the tax payer. The profits from Royal Mail would in turn be transferred to the private sector.

This vital national resource with its unique combination of commercial and social services, is once again under serious threat. The CWU is campaigning against this threat. After today’s debate at the TUC, we are organising a demonstration at the Labour Party Conference on Monday 22nd September.

It is time for the public to prevent asset strippers from acquiring Royal Mail. The future of the universal service, and the Post Office Network, depends upon the support of those who will fight for a positive future for Royal Mail.

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