Mandelson has not yet made his case over Royal Mail
Reading over the notes sent out by Peter Mandelson and Pat McFadden to the PLP and constituencies, it’s clear to me that the government has not yet made its case for this 1/3rd privatisation of Royal Mail. As a matter of course, let us be clear that privatisation is what is involved, whether we say it outright or refer to it as the ‘expertise and investment of a strategic minority partnership’.
The notes are details-light, naturally, neither discussing how much the new company (set to be TNT, presumably, since no one else has shown any interest) will pay in investment, or how much they will be permitted to cream off as profit. They simply hammer home the point, again and again, that we need ‘modernisation’ and that the government won’t pay a no-strings bail out for the ailing Royal Mail pension fund.
Dropping letter volume – down 7% to 78 million per annum since 2005 – is mentioned, as is the need to mechanize the Royal Mail. All of this begs the question, however; if Royal Mail can be made profitable, don’t we want the profits to be social, paying off a healthy pension fund and relieving the government of their £150 million bill that sustains the Post Office Limited arm.
Capital costs can be stumped up by the government, and heaven knows this government is mad keen on bringing in outside advisors from the commercial sector – even when they make a mess of everything – so why must this outside investment be brought in? Moreover, where does this potential ‘strategic partner’ expect that it will make its money from?
Could it be, perhaps, that yet again the government will indulge in a privatisation deal that guarantees their strategic partner will make money, and that their partner can walk away with no giant bill if they wish? It seems, these days, like all privatisation is a choice between MetroNet and or any number of the firms that have worked on IT programmes for this government:
Either they go bankrupt or they walk away after an appalling job, with their programmes years off target and nothing to be said for the vaunted private sector efficiency.
I suspect that one of the reasons that CWU is hopping mad is because this part-privatisation will mark a determined attempt to outsource jobs to staff not protected by union negotiations. Not to mention laying off staff and giving everyone else more to do. Private companies are better at doing this sort of thing than the government is and, moreover, the government doesn’t have the sort of resilience it once had when it took on the Fire Brigades Union.
Conservative Home has reported that unspecified back bench MPs may be voting against the government this time around, but that with Lib Dem support and Tory support, the government will get its plans through parliament. Hat tip to Tom Miller for that link. This is probably accurate – and the rebellion may go even beyond back bench MPs, since the CWU has threatened disaffiliation and a number of MPs have small majorities to keep their eyes on.
Interestingly the commentary on Conservative Home has been to react against plans for privatisation, though from somewhat doubtful motives. Royal Mail as a national institution, protectionism and Europhobia (since EU Directives are blamed) feature highly. The key point is that once again the government has failed to argue its point and by pushing ahead is hastening its own demise.