Royal Mail will prove a real political test

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Evening Standard comment
20.05.10

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The apparent determination of the Business Secretary, Vince Cable, to privatise Royal Mail could prove a real early flashpoint for the coalition — and for the opposition. Privatisation is unfinished business from Labour's last term, then a project of Lord Mandelson. But it is likely to prove deeply divisive for the coalition. It could also expose real differences between Labour leadership contenders.

The case for greater private involvement in Royal Mail is strong: it has struggled commercially for years in a market undergoing rapid change. Its service in parts of London especially is lamentable. It needs new capital that it cannot realistically expect without selling off assets.

The question is how far to push privatisation. The Lib-Dems' manifesto proposed selling off 49 per cent of Royal Mail while dividing the remainder between its employees and the Government. The Tories favour a complete sell-off.

How Mr Cable negotiates those differences will test to the limit both his own considerable political skills and the patience of hard-liners in the two parties. The prospect of the state or the unions holding on to a chunk of Royal Mail will enrage Tory free marketeers. The spectacle of Lib-Dem ministers selling off public assets and abandoning workers to an uncertain future will be anathema to the Lib-Dem Left. As for Labour, watching the Tories and Lib-Dems beating up the unions will surely flush out some centrist figures, never mind the Left of the party, to voice more forthrightly the discomfort they always felt with Lord Mandelson's plans. As the Labour leadership hots up, with both Blairite Andy Burnham and Left-winger Diane Abbott joining the contest, Royal Mail privatisation could become an important dividing line.

Royal Mail needs radical surgery. We hope that the coalition has the courage to perform it, whatever the political storms the issue will bring.

BA faces the abyss
The decision by a High Court judge to overturn this week's ruling on the British Airways strike is a disaster for the airline and its customers. It could be a disaster for its employees too. Previously, a court had ruled that strikes planned for later this month and the first week in June, including during the major travel period of school half-term holidays, were illegal because of minor technicalities in the way the Unite union notified members of the ballot result. The reversal of that decision will almost certainly mean that a majority of BA's flights are grounded.

Unite cabin crew remain determined to oppose changes to working practices and to flight perks for longer-serving staff. It is hard to credit the short-sightedness of this position, given the position of the airline industry in general after the recession and the ash cloud, and of BA in particular as it struggles to emerge from years of financial woes. Negotiators may now try to avert the strike: it is to be hoped that is still possible. But whatever happens, BA chief executive Willie Walsh

[Lounge Lizard]

I heard it said today that this coalition is like trying to mix oil and water, and this issues tends to prove that that is the case.