Billy - It's not too late to keep RM in public ownership

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TUC 2012: It’s not too late to keep Royal Mail in public ownership

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The most recent data confirms that the Coalition government’s economic policy has failed. The economy has gone back into recession, and faces a prolonged period of stagnation.

Even by its prime measure, a reduction of public sector’s spending deficit, the government has failed. The Office of National Statistics reports that the deficit for the first six months of 2012 is £37.3 billion. But, as Mick Burke has demonstrated in Socialist Economic Bulletin, this is a massaged figure. He writes:

“… This total is flattered by the strange decision relating to acquisition of Royal Mail pension funds ahead of planned privatisation. In effect the government has decided to include the assets of this fund, but not its much greater pension liabilities in its own accounts. This and another smaller transaction lowered government borrowing by £30.3 billion. The underlying deficit, excluding these transactions is therefore £67.6 billion in the first six months of the year. This compares to a deficit of £60.5 billion in the first six months of 2011. The deficit is rising, not falling”.

The coalition remains as keen as ever on the privatisation of Royal Mail. However it is not so easy to sell the company. Although the company is profitable the letters market is declining. This has been exacerbated in the UK by the failure of successive governments to invest in Royal Mail, slowing down its ability to provide new services and products.

In addition, a system of regulation had been imposed which has resulted in Royal Mail subsidising its competitors. Competitors would trunk mail to Royal Mail sorting offices which is then delivered at a loss of over two pence per item. Following years of campaigning by the CWU, this system is being changed over an 18 month period from April this year.

The result is that the immediate financial position of the industry is not clear to potential investors. The government, and Royal Mail management, are saying that a sale of Royal Mail shares is not possible before late 2013 or early 2014. Of course, the union takes this with a pinch of salt. George Osborne is perfectly capable of selling the company at a loss, as he did in the case of Northern Rock.

But we will be renewing our campaign against privatisation. In our view, Royal Mail can provide the service business and our communities need whilst remaining publicly owned.

The privatisation of Royal Mail and its split from the Post Office branch network, will lead to a reduction of services and big price increases for domestic customers and small businesses. Even in advance of privatisation, we can see this happening in the recent enormous rise in stamp prices.

The Coalition government is beginning to fall apart. An early General Election is likely. In these conditions, it is an entirely realistic aim to defeat the privatisation of Royal Mail. Inside and outside the labour movement there is a clear majority which opposes privatisation. By united action, we can defend our publicly owned postal services.

The Morning Star, 10th September 2012 p.21

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A little early perhaps. But may I return the greeting - Merry Christmas Night Tonic.