Mail sell-off is market state's 'wild experiment'

The privatisation of the Royal Mail after centuries in state hands is not simply a carve-up of a public service for the benefit of big business and shareholders. It’s also another step down the road towards a fully-fledged market state.

A market state’s task is to provide opportunities for capitalism within the formerly public realm. That can mean everything from taking over parts of the NHS, running prisons, operating trains and – now – delivering letters and parcels.

This vision of the contemporary capitalist state is shared by all the mainstream parties. Royal Mail can be privatised quickly because the previous New Labour government created the conditions for this to happen.

In 2006, the Royal Mail lost its 350-year old monopoly and the British postal market became fully open to competition. A bid to privatise the service failed after a revolt by backbench Labour MPs.

But last year, legislation was passed which created the conditions for next month’s sell-off. The mail service will be sold on the stock market and quickly fall into the hands of equity funds, pension funds and global investors. It will be run for profit which means a ruthless rationalisation of services, especially outside the major towns and cities.

Naturally, the sale of Royal Mail has been brought forward to try and beat the programme of strikes planned by the Communication Workers Union.  The CWU is pinning its hopes on a Labour government renationalising the service. That’s not going to happen, as Ed Miliband’s party is committed to the present government’s spending plans. And that doesn’t include spending £3 billion or so in taking the royal mail back into public ownership.

Labour’s policies are being shaped around Miliband’s idea of “pre-distribution” and “responsible capitalism”. The role of the state here is to encourage and “incentivise” the private sector to pay better wages and treat their workers better. Old-style state control it isn’t.

As for Miliband’s would-be partners in a future coalition government, it is significant that the privatisation of the mail service is being pushed through with enthusiasm by Vince Cable, the business secretary. Once touted as a Liberal Democrat that Labour could work with, Cable is totally pro-business.

Billy Hayes, general secretary of the CWU, points out the overwhelming hostility among the public to privatisation, with 70% opposed according to one poll. But that cuts little ice with a government responsible for a national debt that is increasing at a rate of £3,200 a second. The sale of the Royal Mail won’t make a huge difference, but every little helps.

Hayes is confident that his members – 96% of  who say they are against privatisation, despite being offered a bribe in the form of shares –  will vote for a programme of rolling strikes. “Privatisation will destroy a national public service and lead to a race to the bottom on jobs, pay and conditions. It is vandalism, and must be stopped.”

But how? The British capitalist market state is the most advanced in its ambitions to divest itself of its former role as custodian of public assets and will sell them to whoever wants to buy them.  Railways, airports, water, nuclear power stations and much more are owned by global corporations and banks whereas the American state jealously guards national assets from foreign control.

Even when it comes to the mail, only a handful of countries have privatised their services. In Argentina, it was such a disaster that it had to be renationalised. A taste of what British postal workers can expect is shown by the experiences in the Netherlands . PostNL, formerly a subsidiary of TNT, is driving down wages and conditions and is planning to restrict deliveries to three days a week.

So Hayes is partly right when he says the ConDems’ plans amount to a “wild experiment”. But that’s the nature of the beast. Rather than relying on Labour, the CWU would be better off joining with the teachers, firefighters and other sections coming into conflict with the coalition this autumn.

Their aim should be to develop support for action to oust the government and launch a discussion on what kind of new, democratic economic and political system should replace the discredited market state. That’s the way to protect and develop public services.

Paul Feldman
Communications editor