Michael Meacher MP

Mrs. Thatcher csrried through a huge programme of privatisation of industries, Blair attempted the same (though with only limited success) in respect of services, and now the Tories are hell-bent on achieving what Blair failed to do, but using a different route – the austerity drive.   By shrinking the State on the ostensible pretext that the budget deficit makes this ‘unavoidable’, the Tories have the perfect excuse to complete the ideological anti-State revolution to reverse once-and-for-all the post-1945 hegemony of social democracy.   They are certainly approaching the task with relish on tghe evidence of just 2 months of coalition government. (more…)

One issue that you can guarantee won’t be debated in this coming election dominated by cuts, cuts, cuts is: what kind of public services do we want in this country and how should be paid for?   The Audit Commission has made a stab at this, but come up with rather trite (and Tory) conclusions – devolve them to local level and farm them out to voluntary, charitable or community organisations.   That would produce very uneven services across the country (postcode lottery) and return to the post-war Lady Bountiful in place of universal rights and entitlements.   Back to the 1930s – any takers? (more…)

Rarely can there have been an industrial dispute where everybody loses, whoever wins. The public loses if a series of rolling strikes badly disrupt Christmas post deliveries. The Government as sole owner of Royal Mail will take political flak for allowing the dispute to slide into a national strike. Royal Mail loses if lengthy disruptions increase the fall in UK mail volumes, already at 10% a year, when every 1% of lost mail volumes costs it £70 million in lost revenue. Postal workers and the CWU lose if the pension fund deficit, now estimated to be some £9bn, is not met and continues to drain off £800 millions every year in cash which could otherwise be spent in modernising plant and improving working conditions. The problem now as both sides square up for a confrontation is that the traditional (and historically often highly successful) route to resolving deeply rooted and entangled disputes like this one – via ACAS – has now been deliberately blocked, and all sides have now settled for the worst, with damage limitation to their own position by putting the worst gloss on the motives and intentions of the other parties.

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Perhaps the sole benefit from the last week’s calamity is that the Government recognised that pushing through the Post Office Bill (Lords) was now impossible – for the moment. It could be forced through on Tory votes, but the fissures that would spark in the PLP where morale is now rock-bottom could re-open the leadership question almost before the last near-lethal bout of turbulence had subsided. So it has been postponed, but not abandoned. It will still be introduced into the Commons for second reading in the autumn, or even in the summer before the recess if the political atmosphere improves (some hope). But even an autumn revival of the Bill is an insanely risky course given the numbers in the PLP ranged against, as even the Whips freely admit. Brown is thus caught in a classic pincer movement – between dependence on Mandelson who allegedly saved his premiership (or so Mandelson and some elements in the media would have us believe) and vulnerability to the PLP where a 50% rebellion on this issue (on the Whips’ calculations) could be the final straw that broke the Government’s back. Could Brown be so foolhardy as to risk it?

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The crisis over MPs’ expenses is concealing the other major disaster facing the Government before the summer if it doesn’t change course. Yesterday’s report that Royal Mail had doubled its annual profits to £321m raises again rather sharply whether it is really wise or necessary to part-privatise it, or whether that merely represents Mandelson’s obstinately clinging on to an increasingly discredited New Labour ideology. Rather than welcoming Royal Mail’s growing success within the public sector, he chose to draw attention to the huge increase in the pension deficit from £2.9bn to £6.8bn. But what he failed to note was that this results entirely from the irresponsibility of successive Governments (Tory from 1990-97 and then New Labour from 1997-2003) in taking employer contribution holidays away from the pension fund. Mandelson is now losing every argument over Royal Mail, and it’s no longer a rational discussion over what is the best policy. It is Mandelson digging in regardless of the arguments to save face and what is left of a crumbling New Labour privatisation programme. But for that he needs the Parliamentary numbers, and he doesn’t have them, as our campaign has shown.

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The row over Royal Mail really should be sorted without a train crash. Quite apart from taking over the £9bn pension deficit (which New Labour is half responsible for, having continued from 1997 to 2003 the Tory policy started in 1990 of taking employer contribution holidays), the Government is insisting that there needs to be increased investment, new management, and a partnership deal with the CWU which the workforce can really get behind and commit themselves to. Almost everybody agrees with this. The sticking point is the 30% privatisation which Mandelson says is necessary as the only way to improve management skills and lever in modernisation expertise from elsewhere in the industry. But bringing in new management happens repeatedly in both the public and private sectors without any change in the equity structure. Then we are told that only private equity will transform the culture of Royal Mail. But it is difficult to see how a minority stake could achieve this, unless having obtained the 30% thin end of the wedge the Government then intends later to extend it to a majority stake or to full privatisation (as the Tories certainly would) which is utterly contrary to Labour’s manifesto and which the Government have (so far) flatly denied. There must be another way, and there is.

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It is almost incredible that a Government that is 12-20 points down in the polls and facing an election in a year’s time should want to semi-privatise the Royal Mail. When that is combined with pushing through the so-called Welfare Reform Bill and the third runway at Heathrow, it might seem as if the Government had a death wish – or a desire to placate business even at the ultimate price of electoral defeat. But even leaving aside the stark politics of starting down the road to full privatisation of Royal Mail (for nobody doubts that is the real objective), it’s not as though any of the arguments adduced in support for this misadventure actually stand up.

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The Hooper Report has focused attention on three key issues for Royal Mail – a pension fund deficit rising to some £7bn, the performance of its specific regulator Postcomm, and a part-sale of the service to a private sector operator. The direction of Mandelson’s response is clearly towards bringing in a foreign company such as the Dutch TNT or the German DHL arm of Deutsche Post to provide a ‘strategic partner’ to inject private capital and private management expertise. But that is not necessarily the logic towards which Hooper’s analysis leads at all. If the State is used to lift the main financial burden on Royal Mail, the huge pension fund deficit, as the Government clearly seems to intend, there are several steps which can and should be taken which would almost certainly make a public sector reform more beneficial, economically as well as socially, as any privatisation.

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