Royal Mail should stay in public hands

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Peter Mandelson's clumsy defence of the postal services bill only proves that private isn't always best



Yesterday saw the second reading of the postal bill that will, if passed, see the break-up of Royal Mail – with a large part of it sold to a private bidder (possibly the none-too-squeaky-clean TNT, accused only this week of tax-dodging, union-bashing, wage-cutting and poaching Royal Mail business).

Lord Mandelson opened proceedings in the Lords and denounced those who peddle "fiction" about this bill and the government's intentions for Royal Mail. Much of his obloquy was directed at those opponents of the bill who, he said, put out misleading information – such as the fact that Royal Mail was going to be broken up and not publicly owned any more. In the same speech he confirmed that 30% of Royal Mail is now up for sale, so it won't be publicly owned, it will be part publicly owned. But Mandelson was far from proving his opponents' inability to distinguish between fact and fiction.

Many governments had wrestled with the challenge of changing Royal Mail, said Mandelson. Yes, the last Conservative government tried to sell it all off. For the past 10 years, Labour has allowed profitable Royal Mail business to be sold off, hobbled it with an appalling, deregulation-mad regulator, taken government business away from the Post Office, weakening it further so that closures seemed justified, and liberalised years before European competitors felt they had to.

Some opponents of the bill had shockingly claimed, said the business secretary, that selling off a third of Royal Mail would endanger our great universal service obligation (post delivery everywhere in the UK, at the same price). Under his plan, Ofcom and the government would protect it. But the truth is, a halfway competent set of lawyers could prove what they liked about the cost/irrelevance of USO and a weakened Royal Mail, with its profitable bits gone, will be in no position to protect it. The only real protection for our great national service is to keep it publicly owned, maybe even under a different model.

Opponents, claimed Mandelson, talked about their own interests but not about those of the public. But Royal Mail is a public service – it is striking how much the needs of the customer are at the forefront of the bill's opponents' argument. They point to the cheapness of our letters, the general satisfaction of the public with the service they get, the importance of the socially binding service of the USO, the great tradition of the Royal Mail, the part it plays in the community fabric of the nation.

The pension deficit is the primary reason being used now to justify this bad bill. Mandelson talked of the bill enabling the government to tackle the £9bn problem "head on". But the government has already said it will take over the deficit (BT, that privatised utility, has just announced that it has a £10bn pension deficit) so it could then keep Royal Mail as the public service people overwhelmingly want, put a rocket up the management, and reap the rewards from a grateful public when we see that our government now sees that private is not always best, that it listens, and then gives the people what they want.