Coalition plans Royal Mail sell-off at knock-down price

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News broke yesterday that the long expected attempt by the coalition to sell off and privatise Royal Mail is set to occur this autumn.

What has surprised commentators is the knock-down price that the government is prepared to accept for what would be the largest privatisation since Thatcher sold off British Telecom in the 1980s.

Analysts had previously valued Royal Mail as worth £4 billion and this was the sum expected to be raised for the exchequer – now it transpires they are willing to sell it off for just £2.5 billion turning this privatisation into a fire-sale of the largest public utility in order to desperately raise some cash to stave off state bankruptcy.

The privatisation of Royal Mail is to take the form of a stock market flotation rather than an outright sale to private companies.

The first attempt to privatise Royal Mail was made under Thatcher in the 1980s but she was unable to push it through in the teeth of fierce public opposition.

In 2009 the Labour government tried to sell it off to Deutsch Post or TNT – both turned down the opportunity, not least because they couldn’t afford it.

Now with the complete backing of the Labour Party the coalition are finally set on a flotation that will see Royal Mail flogged off for a pittance.

The immediate effect of privatisation will be to drive the cost of first class mail up to unaffordable levels.

Next to go, despite all reassurances to the contrary, will be the universal delivery whereby every letter is delivered for the same cost to any part of the country.

This legal obligation will not survive the drive to increase profits by a privatised mail service.

As for the staff, they can expect massive cuts in both staffing and pay levels in an effort to extract the maximum amount of profit out of the service.

Postal workers have been used by this and successive governments as just one huge cash-cow for years.

Last year the government asset stripped the entire £28 billion worth of the Post Office pension scheme (the largest in the country) when it took the scheme over.

These assets were immediately transferred into the treasury and used to cut the budget deficit.

At the same time, the government took on the huge pension liabilities of the fund amounting to £37.5 billion – under government accounting these liabilities are spread over 20-30 years so the figures could be fiddled by the Tory chancellor, George Osborne, into looking like his budget reduction through savage austerity was actually working.

This manoeuvre to steal the postal workers’ pension fund to pour its assets into the black-hole of debt caused by the collapse of the capitalist banking system, while at the same time making Royal Mail a more attractive proposition for privatisation, was greeted as a ‘victory’ by the leaders of the postal workers union, CWU, as somehow protecting their members’ pensions.

These leaders had tacitly accepted the inevitability of privatisation and were grasping at any straw that promised to protect their members from its effects.

In their press statement the CWU leadership say that next week’s delegate conference will be discussing and re-affirming the unions’ opposition to privatisation and they do not ‘rule out’ industrial action.

It is not a question of ‘not ruling out’ strike action, it is a question of members demanding that the leadership immediately mobilise the full strength of the union to halt this government in its tracks.

CWU members must demand that the union calls out its 204,500 members in posts and telecoms and demands that the TUC likewise call out its six million affiliated members on a general strike to bring down this government and stop the destruction of public services and the welfare state once and for all by going forward to a workers government.