Labour's dilemma over Royal Mail
- 26 Feb 09, 12:20 PM
Why, at a time like this, are ministers picking a fight with many of their own supporters about partially privatising one of the most cherished institutions in the country?
That is the question being asked by many in the Labour Party - not just on the left but also on the right and in the cabinet itself.
On Tuesday morning what's called the "L committee" of the cabinet (the L is for legislation) could not agree on the Parliamentary timetable for the bill which will part-privatise Royal Mail.
Harriet Harman chairs the committee as Leader of the Commons. She told colleagues she needed more time to consider how to proceed.
They claim that only the intervention of the prime minister secured her eventual agreement to publish the bill this week with the intention of it becoming law by the summer.
If Harman has her doubts she is not alone.
The Chief Whip Nick Brown has done his Parliamentary arithmetic and has told the other Mr Brown that, in its current form, this bill can only be won with Tory votes.
Alan Johnson, the former general secretary of the postal workers' union, is said to be no more convinced now than he was when he fought Tory plans to privatise the Royal Mail.
Some Labour MPs believe that he has rediscovered his appetite to lead his party in the event of defeat at the next election.
Some also claim that David Miliband is a sceptic.
Even Blairites, who usually call for more not less reform, are unconvinced. One told me "It's all very well to take on the party when you're on the public's side. But when you're not..." The sentence trailed away.
So, how do ministers answer the question I began with?
They say they've simply no choice.
Left to its own devices, Royal Mail would simply go bust - sunk by the massive deficit in its pension fund.
If taxpayers are to pick up the tab for that they will, it's argued, demand that the company is finally sorted out. .
Only private management with its experience of running postal services abroad have any hope of doing that, ministers go on to insist.
"We'll have the pension bail out but not the privatisation" comes the reply - not just from the traditionally change-resistant postal workers' union but its many allies.
A growing number in the Labour Party cannot understand how their party can one minute nationalise a bank and the next privatise parts of the Royal Mail.
Today, Peter Mandelson has tried to woo those who are not implacably opposed to private sector involvement in the Royal Mail with a pledge that full privatisation (which he once backed) would be ruled out in this bill and also with promises of changes to the competition regime which many complain makes it uncompetitive.
However, those who have never believed in the New Labour holy trinity of markets, profit and privatisation, now think that they have found their cause, their time and a battleground on which they believe they can win.
