Saving the local Post Office from closure, and the Royal Mail from privatisation, has long been a serious issue on the campaign trail for traditionalists and progressives alike.
At this time – when private banks have ceased lending to sound customers and many urban and rural areas are excluded altogether from essential public utility services – these causes take on a more acute tone. At the risk of schadenfreude at Labour’s calamitous handling of these essential institutions, let’s examine just how the government’s proposals for the postal service fail to deliver (apologies, I couldn’t help it!).
Hardly anyone would deny that the Royal Mail faces pressure to modernise and to compete with commercial services, and that to keep pace with an ever-changing communications landscape some restructuring is required. The question is how this is best achieved, how to prioritise disparate facets of the service from universal postal coverage to banking and civil services.
According to the accepted Westminster doctrine, established some 15 years ago and remaining today, competition is the key. Ask the Royal Mail to compete for business with private sector providers and its efficiency will increase, the customer will win.
The problem is, private sector providers are able to cherry-pick juicy corporate contracts and profitable speciality deliveries, leaving the public sector to ensure that Mrs. Jones’ birthday card gets from Weston-super-Mare to Wick on time and intact. Not only this, the underfunded Royal Mail has little capacity to invest in modern infrastructure and facilities.
As befits the current administration, their response is to part-privatise the Royal Mail and sell off hundreds of Post Offices, hoping that the private sector will still serve communities whilst turning a handy profit. Unsurprisingly this is not a popular proposal; so much so that as many as 150 Labour MPs are expected to vote against their own party’s policy, risking turmoil for an already beleaguered leadership.
As far as the Conservatives are concerned Labour’s policy doesn’t go far enough, some Tory MPs favouring a complete sell-off; however they may still support a part-privatisation in the knowledge that they can always complete the job themselves in a few months time.
To avoid the embarrassment of relying on Tory votes to pass this reform into law, a desperate Downing Street scramble has unfolded in the last few days, with Compass chair Neal Lawson apparently failing to get the rebel MPs to agree on a not-for-profit model for the Royal Mail along the lines of Network Rail. Without this compromise the government must steel itself for defeat, potentially scuppering the chances of both postal reform and of Gordon Brown lasting until next June as PM.
So what of the Liberal Democrats – how would we do things differently? As Nick Clegg outlined before our recent Harrogate conference, and again in a speech to the Institute for Public Policy Research, he supports the formation of a stakeholder-owned partnership company along the lines of the successful John Lewis Partnership. Employees would own shares in the Royal Mail, whilst some fraction of the assets would indeed by sold off to raise revenue.
This cooperative-style model of business ownership retains the Post Office largely in the public sector, from where it could be re-launched as a public service provision hub, much as Polly Toynbee argues in her latest Guardian article. A Post Office that provides essential local services whilst remaining in public ownership is paramount to economic recovery in the eyes of many, tying together disparate branches of community life and local government in an accessible and publicly accountable way.
It’s clear that only the Lib Dems have proposals to ensure this outcome; the recent Spring Conference voted the shared ownership scheme into party policy amongst other progressive alternatives to privatisation.
It’s up to Party members, bloggers and campaigners to get that message across, throughout the upcoming local elections, for the run-up to the General Election and beyond, for without such innovative policy the Royal Mail’s demise could form part of this government’s toxic legacy – one that confirms New Labour’s dogmatic pursuit of market-based ideology no matter what the socio-economic fallout may be.
* Prateek Buch is a Liberal Democrat member in Epping Forest, and blogs at teekblog.blogspot.com.
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12 Comments
One thing that the current post office has going for it is that despite the price increases, our stamps are very cheap.
I would be interested to know what would happen to stamp prices if the Lib Dem policy was implemented.
Not an easy one to explain on the doorstep though.
“We believe in a Post Office that is a cooperative-style, stakeholder-owned partnership”
Catchy, ain’t it!
TNT is, I think, the government’s preferred private sector partner for the Royal Mail. Heaven help us: if the Royal Mail is incompetent, which unfortunately it is at times, though at least in part due to being under-resourced by successive government’s, TNT is worse. I’ve just come off the phone to them having been lied to in a succession of calls over their non-delivery of a consignment of Focuses. This is not an isolated case either, and I will now be looking for a new courier. Unhappily, once they own a chunk of the Royal Mail we will be stuck with their useless service for ever.
A way to sell it on the doorstep is “Why not let the postmen run the Post Office?”
@ David: my sentiments exactly. It doesn’t matter how cumbersome the phraseology might be, it’s certainly more sellable than ‘we’re shutting down your post office forever…’
“Why not let the postmen run the Post Office?”
Mandelson and the Tories would have it that the postmen’s union has been running the Post Office for far too long, preserving an excessive number of jobs at the taxpayer’s expense. Hence their call for free market discipline. Can anybody with suitable expertise tell us if they are right about this one?
@ David Allen
“Mandelson and the Tories would have it that the postmen’s union has been running the Post Office for far too long”
From what I’ve gathered from this post the Clegg proposal would essentially involve some ownership of the post office by the workers. That would act to foster efficiency by making workers financial gains reflect the performance. So the emphasis is more the ownership that the running.
Seems like a good solution but that being said I get the feeling that this is a dying industry due to technological innovation and competition I’d give it thirty years tops
The Liberal manifesto states
T”he suppression of economic freedom must lead to the disappearance of political freedom. We oppose such suppression, whether brought about by State ownership or control or by private monopolies, cartels and trusts. We admit State ownership only for those undertakings which are beyond the scope of private enterprise”
Basically if its gonna continue to lose money at some point liberals are gonna have to make a decision if this service is a fundamental right and if so adopt a policy that it just has to be run at a loss
Monkee,
Yes, if a stakeholder partnership means that postmen themselves will have a powerful incentive to get rid of inefficiencies, it could be a viable idea. I see that it is quite different from the Compass proposal that Mandelson rejected. Compass wanted something like Network Rail, which has no stakeholder partnership, and looks altogether too cushy a solution here.
Mind you, if you were the government, would you really want to take up our idea? There could be endless ongoing problems as the postmen argued among themselves as to whether to preserve jobs, or reduce staff so as to increase wages for those retained, or just run back to government and beg for more dosh….
@ Monkee and David Allen: Essentially you’ve captured exactly why the Clegg proposals are more likely to lead to greater efficiency than a Network Rail-style system – ownership. Yes there would indeed be internal arguments over job losses vs. modernisation, but in the end allowing the people who run the business to take their own decisions is the very essence of Liberal economics is it not? In fact one of the reasons postal workers union appears very strong at the minute is the simple reason that the management – and Royal Mail is in no means unique in this aspect IMHO – consistently takes decisions that go against not only the interests of the workers but of the institution as a whole. Having a more shared-ownership model, a la John Lewis, would even out this dichotomy.
I’m not sure why the John Lewis approach would guarantee any better service than straight privatisation. John Lewis is successful because it has plenty of things to sell that people want to buy, and it wouldn’t start setting up branches in rural, unprofitable areas. The government must maintain some real control, but turn branches into centres for government services, as Polly Toynbee and Compass have argued.
Hmm, point taken. John Lewis thrives because it can outsell its competitors, but if it ever lost its popular appeal, it would go bust. Royal Mail could not just be left to go bust, whether TNT or the staff were the part-owners.
So, either TNT or the stakeholder partnership could easily end up causing government lots of problems – e.g. by bleating for big public subsidies, and then running off with excessive profits / wages.
Wholesale privatisation doesn’t sound good either – a private monopoly would soon cut out unprofitable services, remote deliveries, etc.
Perhaps there are no really good solutions, and ours is no more than the best of a bad bunch? Perhaps that’s why we’re not shouting from the rooftops about our brilliant idea here?
In my 60 years of seeing what MPs and Public sector bosses have done to our Public Services, I have this comment to make. The Post Office, up until Margaret Thatcher and Tony Blair, were doing fine. They ( All public services ) were then cut to bits and could not perform correctly. This gave the Politicians and Bosses, the excuse they created, to privatise them. Our public sector workers are worth keeping, but if they made a mistake, they would be sacked. Its the Bosses and Politicians who should be sacked, for having these disgusting plans and idea’s. The public of Britain are being blatantly robbed ! Mr T P Easten.