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1 October 2013

How Labour could still save the Royal Mail from privatisation

A pledge by Miliband to renationalise the postal service could scare off potential private investors.

By Conrad Landin

It was all quite a shock. On Friday, as the government announced that potential shareholders in the privatised Royal Mail were already lined up, campaigners were pre-occupied with the ballot for an anti-sell off postal workers strike. A strike that will now come after the post has been privatised, if the government has its way.

But there is one last chance to save the post from a privatisation the public do not want. Step forward, Ed Miliband.

In Brighton last week, Labour conference delegates voted unanimously to bring Royal Mail back into public ownership should Labour win the next election. Hurried press briefings that this would not bind the leadership were followed by shadow business secretary Chuka Ummuna yesterday clarifying that such a pledge would be “irresponsible”.

Yet in the past week, the Labour leader has has proved that, occasionally at least, one can govern from opposition. And on this basis, maybe privatisation of the post is not as inevitable as it seems. Miliband’s conference pledge to freeze energy prizes was derided by Tories and pundits as unworkable. But it did much more than bring the issue to the headlines: it led the energy companies themselves to subsequently decide that Miliband, and not David Cameron, was shaping their future. The front page of the NPower website was updated within 24 hours to read: “Why wait for Ed?”, as the power giant offered its customers the chance to set their prices until 2017.

It’s something few opposition leaders have managed – but Ed is no stranger to setting the terms of debate. The scene was set by his early display against News International, when the Labour opposition forced the government to commit to the public, judge-led inquiry that became Leveson. There have since been numerous other areas in which Miliband could have used his acumen and judgment to make the Tories fight on his terms, but instead we have only seen a deafening silence. Labour’s economic arguments still centre around “getting the deficit down”, the line pioneered by Cameron, and vehemently opposed by Labour, before the 2010 election. But the policy pledges in last week’s conference speech were at least encouraging. Now, faced with a privatisation that 67 per cent of the public oppose, it is surely time for Miliband to act again.

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The government’s brag that shareholders were waiting in the wings was intended to present the privatisation as a fait accompli. But we forget that no money has changed hands – and potential investors rarely take kindly to hearing their purchases will be snatched away.

Yet despite Miliband’s willingness to challenge the ‘vested interests’ of big business, public ownership remains a toxic phrase among Labour high command. The party’s official history implies that it only regained power in 1997 due to abandoning its policy of nationalisation. But not a single hand went up against the motion at Labour Party conference that called for renationalisation of the post. In the past, Labour leaders from Wilson to Blair ignored party conference decisions on the grounds they would not be popular with the wider public. But as politicians of all parties have drifted away from the realities of ordinary people’s lives, Labour conference now more often proposes policies that could well regain trust and support from voters.

One voice warning against a renationalisation pledge is postal expert David Stubbs. He told the Scotsman that Alex Salmond’s pledge to take the Scottish arm of the post into public ownership in the event of independence would have the “immediate effect… to depress the value even further.” Imagine the effect of a Labour pledge to take it back wholesale. What sort of investor would sign on the dotted line then?

Unfortunately, though Miliband has demonstrated himself well capable of taking on vested interests and winning, he has yet to recognise that sometimes his party’s grassroots might just have it right. That he has only just pledged to scrap the bedroom tax – after months of dithering – suggests that the party’s policy process has failed to listen to party members and councillors who have been protesting since the penalty was first mooted.

Time is running out to save Britain from the devastating service that comes with privatised post, with the transfer of stock expected by 15 October. Pledging to re-nationalise would be a risk, but Miliband has taken those before: and if potential investors run scared like the energy companies, it wouldn’t cost a penny.