Britain needs a one nation, publicly owned Royal Mail

It is time for Labour to underline our commitment to a modern 21st century mixed economy.  We should promise to take back Royal Mail into public ownership if Vince Cable and the Tories succeed in privatising it.  Mixed surely means just that – a thriving entrepreneurial private sector but also a public realm where the profit motive is not the only factor to be taken into account.

Somewhere along the way Labour became a little careless about the distinction. Andy Burnham recently said that when he was made the Minister for communicating NHS reform he was ‘appalled to discover that the staff he met had picked up the message that private equals good, public equals bad’.  Moreover, when Peter Mandelson was trying to persuade the Parliamentary Labour Party in late 2009 to part-privatise the Royal Mail he was asked by a backbencher whether selling part of it to a competitor, like the Dutch firm TNT, was not a bit like selling part of the BBC to Sky?  ‘Could we not all agree’ asked his questioner ‘that this would be unacceptable?’   Lord Mandelson paused for a moment and said that would depend on the terms of the deal.

Of course Tony Blair often pointed out  correctly that he left office with many more and better paid people working in the public services than when he began.  As a Party we failed for many years though to argue strongly enough the case for what is often good and distinctive about their role in terms of delivery, ethos and efficiency.

In 2009 Labour’s Conference voted for a ‘wholly publicly-owned Royal Mail Group’.   Repeating that pledge now would be a clear  political signal that there is an alternative to endless out-sourcing and privatisation.  It would also help create a powerful political coalition.  All opinion polling suggests a substantial majority oppose the sale.  In true One Nation style Labour would be saying we do not want to put at risk a public service founded in 1660.  We would  be guaranteeing the universal service obligation 6 days a week so crucial to small business, particularly in rural areas.  We would be acknowledging the strength of the international evidence – in all six mail services in the European Union which are fully or partly privatised it costs more to post a letter.   In the United States, the land of the free, the Postal Service is an independent agency of the Federal Government explicitly authorised by the Constitution. We would be joining forces with the National Union of Sub-Postmasters who rightly fear that once the connection between the Post Offices and the Royal Mail is broken a further round of closures must be just around the corner.

A promise to take back into public ownership what by 2015 is likely to be a wholly or part-privatised Royal Mail would galvanise the political debate.  It would be an act of strength, wisdom and determination by Ed Milliband on a bread and butter issue that matters to the many not the few.  Of course the Tories, tutored by Lynton Crosby, would try to portray it as an act of fiscal irresponsibility.  The likely sale price is said by city analysts to be around £3 billion.  Last year the Royal Mail, buoyed by the expansion of parcel based e-commerce, made a profit of £400 million.  If it were necessary to buy it back the nation would be getting an asset capable of paying back over time the costs incurred.  In addition by setting it up as an entity not unlike Network Rail there would also be the option of allowing the Royal Mail to borrow to finance investment without adding to the Public Sector Borrowing Requirement.

The Tories would, of course, want to point out that a Labour Government had contemplated part-privatisation itself but this in a way would be playing to our Leader’s strengths.  Part of Ed Milliband’s core appeal  (not least to many Liberal and progressive voters who we lost in 2010)  has always been that whilst remembering the many good things a Labour Government did he is prepared to recognise and move on from the things we got wrong.  Besides, it is quite possible that the mere fact of Labour announcing this policy shift would mean that the sale would collapse.

Bankers are currently preparing a privatisation prospectus for ministers with the intention of a Stock Market Launch no later than March 2014.   By law they have to include a section on  ‘political risk ‘ so that investors are fully informed.  If Labour in effect rewrites that paragraph for them there is a chance that the Royal Mail could still be in public hands by 2015.  Either way, an important political statement would have been made which could only help with the atmosphere in the run up to next Spring’s crucial Party Special Conference on the Trade Union link.

Tony Blair said Labour was best when we are boldest. On  a range of issues from standing in the Leadership Election itself to confronting Mr Murdoch our current leader has shown he has that quality. Going beyond the policy of simply opposing the sale of Royal Mail to actually promising to do something about it would be a further  demonstration of this attribute on an issue understood by all.

John Grogan was Labour MP for Selby from 1997 to 2010.