Privatisation is progress we don't buy it

Saving our country's national treasures will be the focus of many debates during Labour Party Conference this week. One of which is Royal Mail, after the Coalition government announced its intention to sell Royal Mail this financial year.

On September 12th, the Government announced the flotation of the company. But it is nervous because private investors are not certain to support the sale. Amongst their concerns are that an incoming Labour government may wish to overturn privatisation.

The Communication Workers Union (CWU) is asking Constituency Labour Party Delegates to prioritise their motion to Keep the Post Public, in the contemporary motions ballot. If the motion is voted for and becomes one of Labour's four priorities, then the Annual Conference will have the opportunity to debate the campaign against privatisation.

If Annual Conference goes on to support the motion, investors will know an incoming Labour government would fervently defend our public postal service. So, the action taken by Labour MPs and delegates this week could prove a decisive move in securing a publicly-owned Royal Mail and many will be watching closely to see the outcome.

Royal Mail contributes to our economy, and our sense of community. Defending Royal Mail is a popular mandate - 67 % of the public oppose privatisation in the most recent You Gov poll. Royal Mail made £403million profit in the most recent financial year. Any necessary investment in Royal Mail can be secured from its own profits, and by allowing it to borrow from commercial markets.

Across the EU, government related entities like Royal Mail are allowed such facilities. Royal Mail could become a successful 'not for dividend' company whilst remaining a publicly owned service. In line with practice elsewhere in the EU, such borrowing would not be counted on the Public Sector Borrowing Requirement.

Opposition is vital because privatisation will lead to:

  • higher prices for small businesses and domestic consumers
  • pressure to end the six day delivery and uniform tariff
  • a deterioration of services in rural and 'non-profitable' areas.
  • the prioritisation of shareholder dividends over service provision

Privatisation will jeopardise the contribution Royal Mail makes to the national economy through the universal service obligation. There is a clear call from CWU that an incoming Labour government should re-nationalise Royal Mail in the event of the Coalition government actually selling the company.

This is not an issue that can wait until the general election, it is important this motion is prioritised this week, using every power and tactic possible to defend Royal Mail from the Coalition right now.

Beth Farhat

Regional Secretary

Northern TUC

Briefing document (500 words) issued 23 Sep 2013