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Dear Mr Mandelson, don’t destroy our Post Office

Graham Stringer , MP for Blackley, on why we shouldn’t privatise the Royal Mail

Published on March 12th 2009.


Dear Mr Mandelson, don’t destroy our Post Office

I don’t think I’m unique within the Parliamentary Labour Party but there are not many of us who like and respect Peter Mandelson.

I got a much clearer insight than most into his motivation during a long train journey I shared with him about eighteen months before Labour came to power. During this conversation it become apparent that Peter was not only set on winning the forthcoming General Election but he saw his role in supporting Tony Blair as damaging to his own political career.

This was a sacrifice he was happy to make in the Labour Party interests. In a memorable quote he said “most politicians come in seven different colours of shit, but Blair is different and he is the way for Labour to win the next General Election’’.

Peter’s focus is well known and gives rise to his Machiavellian reputation but his loyalty and self demeaning characteristics are less often seen and recognised.

In a sense this is surprising when one considers his second resignation from the Cabinet. He was eventually cleared of all the accusations levelled against him.

Yet he got no credit for resigning to stop the damage to the Government caused by what turned out to be unsubstantiated allegations.

Bringing Peter back into Government was one of Gordon Brown’s most surprising and effective decisions. Almost immediately the energy sapping and pointless sniping between political advisors at Number 10 and the Cabinet Minsters stopped, not least because the most vicious advisors were sacked. A much greater clarity about policy direction was achieved; the proposals for 42 days detention without charge were dropped and the threat to the Post Office of the loss of the Post Office Card Account was removed.

It is therefore doubly surprising that Peter should be picking a fight with the Communication Workers Union about the privatisation of Royal Mail.

Peter is proposing that private sector postal operators should take a minority share of about one third of Royal Mail.

It must have been a very strange question indeed that came up with the answer of ‘give one third of Royal Mail to a private competitor’.

When one strips all the arguments away, what Peter is really saying is that private management is better than public management.

It is almost as if the £25 billion cost to the tax payer of Railtrack has been forgotten and the trillions of pounds fiasco in the banking sector never happened.

Private sector management is often inferior to public sector management.

It is also a very bad deal for the tax payer. The proposals assume the Government takes the liability for Royal Mail pension fund and the private sector takes any future profit.

Nice work if you can get it.

The shareholders of Northern Rock certainly couldn’t get it because exactly this solution was rejected when the Government nationalised that bank.

The fig leaf for these proposals is the Hooper Report commissioned by the Government to look at problems of Royal Mail and published last December.

The part privatisation recommendations rest on analysis that Royal Mail is less efficient than its competitors.

There is very little serious evidence in support of the recommendations or of Royal Mail’s comparative inefficiency. For instance it claims that Royal Mail is less efficient than its main counterparts, the Deutsche Post in Germany and TNT in Holland. (TNT being the most likely privatisation partner)

Hooper is however not comparing like with like.

For instance, 88% of Royal Mail’s revenues are price controlled. The figure for Deutsche Post is one third.

The mail division of Royal Mail is about three times that of TNT and Deutsche Post.

No account is taken of the different population densities of the three countries or their size, shape and topography.

Even the frequency of collection and delivery as well as the number of drop off points is ignored.

Postal workers are furious they can see the flaws in the Hooper Report and the Government’s legislative response.

They were the first postal service in Europe to be opened up to competition.

Unfair competition which required them to deliver their competitors’ letters at a subsidy from them of 2p a letter.

For 13 years Royal Mail put hundreds of millions into the Exchequer and the Government took a holiday from paying into the pension fund.

They also point out that the universal service obligation which requires them to deliver mail to the remotest parts of the country at a fixed price puts them at a disadvantage with competitors who can choose to cherry pick by only operating in big cities.

Postal workers and their union, the CWU feel victimised. They don’t deny that competition from e-mails, texts and faxes mean that they have to change and modernise. They still have £600 million left in the bank for modernisation.

What they don’t need is an unjustified privatisation that 80% of the public oppose.

Peter Mandelson says “we cannot duck difficult questions and choices’’.

Quite, but we have to make the right choice.

Causing disunity within the Labour movement with unjust proposals is a bad choice, so my message to Peter is simple: Modernise don’t privatise.

You have shown yourself big enough to lose face to help the Labour movement in the past.

Withdraw these proposals and help the Labour Government reconnect with its core support.

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6 comments so far, continue the conversation, write a comment.

PeoplebeforeprofitMarch 12th 2009.

the idea that the private sector operates better than the public one is frankly the same old rubbish speeled out by the profit over people brigade. Look at the banks, the trains, the utility and power companies. they only benefit the ones at the top, oh and the shareholders. the rest of society ends up paying for it. And after the PFI disgrace, exacting more cash for less, its typical that some jokers cling to the benefits of privatisiation. lets get real. the 2 top dogs at RM get paid about half a million a year each for p/t jobs. your man Leighton and the dude from the FA. actual posties are paid just above minimum wage.alas if Mandy has his way then yes, provision will get worse. We are talking about sending items of mail (84 million items every day apparently) across anywhere in GB for less than 40p shurely it cant be any more cost-effective than that! the govt are closing Post offices in rural areas depriving people of an indispensible service. We all appreciate they have to modernise but that usually means less staff being expected to do the same amount of work. typical privatisation. if Labour even have the remotest inclination to stay in govt they need to be protecting the working people not selling off an institution that has been connecting people for 400 years!

Public serviceMarch 12th 2009.

It may help keep the Post Office public if government departments used the PO. My Inland Revenue letters come via a private operator. Why?

beeMarch 12th 2009.

It's a lost cause. Let's try privatisation - surely it can't get any worse. Newton Street PO - 2 members of counter staff at 4pm. Whoever takes the post from our office just expects to be gone for 45 minutes. That's not right. Alternatively, TNT need to sort themselves out - a bit of competition might push RM to pull their socks up.

PaulMarch 12th 2009.

the service provided by the Post Office is appalling and there is no justification to keep it under state ownership. Example of hideous service in whalley range;1) reduction in opening hours at local collection office which means it is impossible to collect a parcel unless you are unemployed2) loss of parcels 3) staff that just dont care - so why should I care about them

Bill CobbettMarch 12th 2009.

Graham is right. But he might have mentioned the campaign for the post bank which would save many local branches and bring affordable and not for profit banking to more people see http://post.cwu.org/page/s/postbankOf course Tony Benn set one up in the 1960s (the National Girobank) but the tories privatised it - what is left of it is now lining shareholders pockets in Spain I think (Alliance and Leicester - part of Santander).

NeilMarch 12th 2009.

I really can't believe that the comment 'Private sector management is often inferior to public sector management' is up there with any seriousness. The idea that the public sector operates effectively is farcical. The amount of waste generated in the NHS, local governments, Quangos and regulators is staggering.

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