The only argument that the Tories have put forward to justify the privatisation of Royal Mail, apart from their ideological absolutism against any role for the State, is that it will increase efficiency by allowing it to operate freely within a private market. But that argument is bogus. First, operating within a private market under the terms of neoliberal capitalism means shrinking the workforce, sweating the assets by worsening the terms and conditions of employment, maximising short-term profits within perhaps a 5-year timescale, and then selling on to the highest bidder. All of that is contrary to the national interest. Second, private owners will expand the most lucrative parts of the service, particularly business post, and whittle down as far as they can the more costly elements, especially universal provision at a single price for the whole country, until they feel able to drop it altogether, no doubt on the argument that it’s ‘necessary to save the rest of the service’. Third, they will then sell it off, perhaps to another State-owned postal service abroad such as Dutch or German Post, perhaps even to private equity operating out of a tax haven (as some of the UK water companies already do) or maybe to a Chinese State corporation (already being sought to take over new nuclear build in the UK).
What does ‘efficiency’ mean? Is it efficient to stuff the directors and senior managers with whopping bonuses, long-term incentive plans and multiple share options, while at the same time increasingly casualising the workforce with pay cuts, reduced rights, easier hire and fire, and zero hours contracts? Does that inspire a committed and productive workforce, let alone a fair balance of reward? Was it ‘efficient’ to deregulate finance when in reckless pursuit of short-term profiteering it nearly crashed the whole banking system? Efficiency in neoliberal markets is measured by shareholder returns and mammoth executive rewards; in a well-managed economy it is measured by rising and sustainable market share, service to the community, partnership in industrial relations, and the wider national interest. Efficiency isn’t governed by the immediate sale price (and the proposed disposal for £3bn is a knock-down price for a unique national asset) but by the future audit of costs to the State if subsidies, tax breaks or bailouts are later found necessary.
There are many different models far more suited than privatisation that a creative government could embrace. A Post Bank could be established as a not-for-profit organisation, with profits returned to the business, and with access to both government and private funding. I would be able to borrow on the open market, yet would have a clear public service remit. The board would have public interest directors together with directors elected by the workforce which should have vested in it a quarter or third of the shares in an employee ownership scheme. It would then be driven by the long-term interests of its stakeholders – bond-holders, employees and customers – within a constitution and framework designed to serve the public good.