Articles

Post Office™ Articles

The Government is Planning to Flog off the Royal Mail

The Government is not endearing itself to many of the trade union movement, its members and its own members of parliament, as it tries to push through legislation allowing foreign investment in the Royal Mail.

For many in the labour movement, the Royal Mail symbolizes an industry that should forever remain a state concern and should not be effectively ‘flogged’ off piecemeal to outside bidders.

And the man seen behind the moves to get parts of the Royal Mail privatized is Lord Mandelson. His idea too allow strategic partnerships to take place are causing many labour politicians to try and block his plans, including organising parliamentary rebellions.

One of the outside investors tipped to try and grab a slice of Royal Mail is Dutch postal group TNT.

Lord Mandelson is said to have had a number of awkward meetings with Labour backbench rebels who are determined to put a spoke in the wheels.

One of the problems of modernizing the Royal Mail, as Lord Mandelson and his fans see it, is that legislation is required to get the changes through and this allows the rebels to really cause some trouble.

And despite his being urged by the rebels and trade union members, Lord Mandelson has remained coy about the timing of new legislation for some time.

Seasoned Westminster observers are also a little puzzled why Lord Mandelson seems intent on causing a rupture over the Royal Mail and the contentious plans, at a time when party unity will be needed to be at its most robust. This year may see a General Election and if not this year, then 2010 will be the time for when Brown and co has to go the country. So, Labour needs to show a united front. But the open wound that is the Royal Mail might start a war that could seriously effect the party’s chances to get re-elected.

Waiting in the wings is the quarter of a million members who belong to the Communications Workers Union (CWU) and who are not being shy of their threat to withdraw their Labour Party affiliation should the part privatization go ahead.

The CWU contributes a heavy wedge to the Labour Party, handing over some five millions pounds since 2001. In 2008 alone, it stumped up half a million. Lose that, and their support, and some of the Labour faithful might begin to wonder if it’s all worth it.

But Lord Mandelson seems determined to press ahead, sticking by his passionate claims that the Royal Mail needs better management in place and that without ringing the changes, then the struggling Royal Mail will quickly falter. And the best way of bringing in new blood is via the strategic partnership route, believes Lord Mandelson.

The shadow team highlight Lord Mandelson’s use of the phrase strategic partnership which they believe avoids him using the more emotional part-privatization phrase.

And the Tories are hesitant about their view on the Royal Mail, saying that a degree of fresh commercialisation would probably be a good idea, they obviously like the Labour Lord on the roasting spit and won’t commit themselves to backing future legislation; saying that they have to await the full details.

And the Tories feel that Labour may not be able to resist a grab of the Royal Mail’s massive pension fund which currently stands at over £20 billion.

So, for many observers, Lord Mandelson is literally between a rock and hard place. Do nothing and the Royal Mal will continue to deteriorate on his watch. But take the steps he feels are needed to correct the situation, then he risks being damned by both Labour rebels and union activists. Almost a no-win situation.