Jonathan Sheppard: Why any Conservative must support Royal Mail reform
Jonathan Sheppard is editor of www.toryradio.com and contested Bassetlaw at the 2005 general election.
At the outset I must confess I have a vested interest in the future success of Royal Mail. I started my career as a humble mail room boy and have four years' worth of pension contributions which I would dearly like to see some day. Even if that wasn’t the case, my experience of having worked in the Public Affairs department for a number of years has convinced me that any Conservative should be wholly supportive of Royal Mail reform.
Yet when it was announced that a Labour Government was pushing forward plans to part privatise Royal Mail, I nearly fell off my chair. Not because I don’t think it’s the right thing to do, but because it makes no sense for them to pick this fight at this moment in time.
Some bloggers have argued that as the Conservatives are in opposition, they should of course oppose this measure. I take a different view. Given as a party when we were last in power we proposed to privatise all of Royal Mail, why on earth would we object to private involvement now?
Let's not forget that out of the whole network of Post Office branches - they are all private businesses apart from the 500 or so directly operated ones - there is already a strong history of private involvement in part of the Royal Mail Group.
The Government in its proposal have wisely stated that Post Office Ltd which, operates the nationwide network of sub post offices, is not included. They have therefore already neutralised any argument that could be put forward that part-privatisation will lead to post office closures. It is of course interesting to note that some of those Labour MPs who now object to part privatisation of Royal Mail are the very same ones who voted for the Urban Reinvention programme which effectively used taxpayers' money to shut post office branches.
The proposal put forward by the Government is now focused on the letter and parcel business, which is historically where the Royal Mail has made the bulk of its profit. The problem is Royal Mail is no longer in the same position as it was in the 1980s.
20 years ago it was almost treated as a cash cow by Government. It made millions and the Government took the money and didn’t allow the company to invest as it should have. So were mistakes made? I suspect so. The same happened with the pension fund. The company took a pension holiday in the good years and now it has a huge deficit.
We now have emails, faxes, text messages and aggressive competitors just waiting to cherry pick business from Royal Mail. That is a reality that has to be faced.
Industrial relations were a problem when I worked there and it’s still an issue to this day. Some reports suggest strikes at Royal Mail account for up to 60% of days lost due to industrial action in the economy – a shocking statistic. Can that be solved by tinkering around the edges or does there need to be more radical reform? I suggest the latter.
Opponents are already up in arms. Some are suggesting that before there is any partial sell off, postal prices should be allowed to increase. I totally agree. Compared to the rest of Europe, our postal prices are far too low. To be able to send a letter from Cornwall all the way to the Highlands for 36p is a nonsense. It’s pretty good value to get it delivered within London! But price rises alone won’t solve the long term decline of Royal Mail which perhaps private capital and expertise can help.
What perplexes me the most is surely this is one fight the Government didn’t need. The Conservatives should support, because it’s the right medicine for what is a sick patient. The Lib Dems proposed something similar only a couple of years ago and should also be supportive.
If it wasn’t such a serious issue I would have a wry smile just looking at who is most up in arms over this move, namely Labour backbenchers and Labour’s paymasters, the Unions. Why they have picked a fight with their own side, and the Group they will be begging to fund their election campaign, is beyond me.
Wouldn’t it be ironic to see a move pushed forwarded by arch Blairite Lord Mandelson, being so savaged by Labour backbenchers and the Unions, that one final backtrack is performed, and the issue of Royal Mail sounds the last post on Brown's tired premiership?
Royal Mail can’t just be propped up and allowed to go into terminal decline. To prevent it facing a death of a thousand cuts, any Conservative should back plans to reform this once proud world-beating organisation, even if a side effect of that support would be to help Gordon Brown out of another mess of his own making.