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Labour must pledge to renationalise Royal Mail along with water, rail, energy and banks

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.

5 Comments

  1. terry sullivan says:

    there is nothing that cannot be worsened by the dead hand of govt interference!

  2. terry sullivan says:

    there is nothing that cannot be worsened by the dead hand of govt interference!

  3. Rob the cripple says:

    I would hope a site like this would think this is right and if I was in the Labour party and not an associate member I’d be saying the same, sadly we had a labour party for three terms in which the sell off was the way forward it was Labour that planed the sell off of the Post office and Royal mail so I think you will have to battle New and Newer Labour.

    MIliband is heading further to the right these days I will put my life on it Blair is now the force behind Miliband and he is so weak he will allow it, weak or desperate.

    The Trains in the UK is now one of the most expensive ways to travel, I had to go to London by train to see a consultant, I ended up going by taxi since it was nearly £50 cheaper. Same when I went to Cardiff to see the spinal injury hospital, I used a taxi wheelchair service and saved £120 .

    The fact is trains are now for the rich and well off not the poor or even the lower middle class.

    Water Railways electric gas and to built some old fashioned council houses , sadly labour’s way past those days.

    The Tories and the Tory lite party I’m sure if at the next election the Tories are looking for a coalition partner Labour will be in line the desperation to govern has taken over even policies these days.

    1. terry sullivan says:

      orders from brussels

  4. Rod says:

    Mandelson wanted to sell of the Royal Mail and Brown backed Mandelson. Now the Tories are following New Labour.

    Can we expect a u-turn from the Labour’s out-of-touch PLP? Will they initiate a high-profile campaign to the keep Post public?

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