How Labour could still save the Royal Mail from privatisation

It was all quite a shock. On Friday, as the government announced that potential shareholders in the privatised Royal Mail were already lined up, campaigners were pre-occupied with the ballot for an anti-sell off postal workers strike. A strike that will now come after the post has been privatised, if the government has its way.

But there is one last chance to save the post from a privatisation the public do not want. Step forward, Ed Miliband.

In Brighton last week, Labour conference delegates voted unanimously to bring Royal Mail back into public ownership should Labour win the next election. Hurried press briefings that this would not bind the leadership were followed by shadow business secretary Chuka Ummuna yesterday clarifying that such a pledge would be“irresponsible”.

Yet in the past week, the Labour leader has has proved that, occasionally at least, one can govern from opposition. And on this basis, maybe privatisation of the post is not as inevitable as it seems. Miliband’s conference pledge to freeze energy prizes was derided by Tories and pundits as unworkable. But it did much more than bring the issue to the headlines: it led the energy companies themselves to subsequently decide that Miliband, and not David Cameron, was shaping their future. The front page of the NPower website was updated within 24 hours to read: “Why wait for Ed?”, as the power giant offered its customers the chance to set their prices until 2017.

It’s something few opposition leaders have managed – but Ed is no stranger to setting the terms of debate. The scene was set by his early display against News International, when the Labour opposition forced the government to commit to the public, judge-led inquiry that became Leveson. There have since been numerous other areas in which Miliband could have used his acumen and judgment to make the Tories fight on his terms, but instead we have only seen a deafening silence. Labour’s economic arguments still centre around “getting the deficit down”, the line pioneered by Cameron, and vehemently opposed by Labour, before the 2010 election. But the policy pledges in last week’s conference speech were at least encouraging. Now, faced with a privatisation that 67 per cent of the public oppose, it is surely time for Miliband to act again.

The government’s brag that shareholders were waiting in the wings was intended to present the privatisation as a fait accompli. But we forget that no money has changed hands – and potential investors rarely take kindly to hearing their purchases will be snatched away.

Yet despite Miliband’s willingness to challenge the ‘vested interests’ of big business, public ownership remains a toxic phrase among Labour high command. The party’s official history implies that it only regained power in 1997 due to abandoning its policy of nationalisation. But not a single hand went up against the motion at Labour Party conference that called for renationalisation of the post. In the past, Labour leaders from Wilson to Blair ignored party conference decisions on the grounds they would not be popular with the wider public. But as politicians of all parties have drifted away from the realities of ordinary people’s lives, Labour conference now more often proposes policies that could well regain trust and support from voters.

One voice warning against a renationalisation pledge is postal expert David Stubbs. He told the Scotsman that Alex Salmond’s pledge to take the Scottish arm of the post into public ownership in the event of independence would have the “immediate effect… to depress the value even further.” Imagine the effect of a Labour pledge to take it back wholesale. What sort of investor would sign on the dotted line then?

Unfortunately, though Miliband has demonstrated himself well capable of taking on vested interests and winning, he has yet to recognise that sometimes his party’s grassroots might just have it right. That he has only just pledged to scrap the bedroom tax – after months of dithering – suggests that the party’s policy process has failed to listen to party members and councillors who have been protesting since the penalty was first mooted.

Time is running out to save Britain from the devastating service that comes with privatised post, with the transfer of stock expected by 15 October. Pledging to re-nationalise would be a risk, but Miliband has taken those before: and if potential investors run scared like the energy companies, it wouldn’t cost a penny.

This article originally appeared at the New Statesman.

Bail-out banks need a strong-arm, not a sell-off

The announcement that Lloyds TSB are back in profit has automatically triggered discussion of the government selling off its 39% share in the bank, back to the private sector. For Labour, it should trigger a discussion on an increasingly interventionist approach to the economy.

Britain’s privately-owned banks were bailed out with billions from the taxpayer when they failed. Cameron and Osborne plan to sell them back to the same people at a cut-price rate. As has been written about Lloyds and RBS in The Guardian, the government wants to ‘sell them off fast, regardless of the loss to the public purse or the damage to the economy.’

What has the government done with the banks over the past five years, whilst it has owned large or even majority shares? Though bailed-out by the taxpayer, the state has kept the job of running the banks at arms-length. The government has not made use of the economic levers available to it.

As one economist said,

‘the government kept out of the running of these state-owned banks even though the taxpayers are invested in them. The government allowed the top executives to continue with their grotesque bonuses, speculative investments and rate-rigging…the banks have failed to revive lending to the small businesses and households who need it.’

Michael Burke described these banks, sitting on growing funds, as having,

‘uninvested profits sitting idle in state-owned banks … the private sector’s refusal to invest is because they cannot be certain of making a profit’.

On the other hand, he said, the state,

‘can make successful large-scale investments which are not profitable to the private sector because uniquely it derives its return from taxation… It is simply a matter of political will to tap these vast resources for investment in housing, energy, transport, infrastructure and education.’

But rather than use its control of the banks to rebuild the economy, when private investment has collapsed, the government’s, ‘overriding political concern has been to prepare them for re-privatisation.’

Labour has already announced its commitment to an investment bank but did not outline an alternative strategy for using the bailed-out banks. Neither has it made a commitment to significantly increase investment if elected in 2015, including borrowing whilst interest rates are low. It has instead called on Osborne to bring forward planned spending.

At the TUC in 2012, the Congress backed a statement for ‘turning the government ownership of RBS into 100% ownership as a State Investment Bank’, while also backing ‘full public ownership of the sector and the creation of a publicly owned banking service, democratically and accountably managed’, such is the level of public disgust with the banking sector.

The sell-off of Lloyds and with RBS only a matter of time, is part of the Tory commitment to shrinking the public sector and leaving economic decisions to the market. A strategy that has demonstrably failed since they took office in May 2010.

In contrast, the Labour Party must make a much clearer commitment to making use of economic levers, directing banks it owns to invest in major infrastructure projects, as part of a wider commitment to a more interventionist approach into the economy as a whole. The bail-out banks need a strong arm, not a sell-off.

New EU Health Regulations – improving patients’ rights or more NHS privatisation in disguise?

It is appalling that the recent NHS privatisation regulations have now been passed, despite a broad-based and vigorous campaign against them.

The Regulations, made under Section 75 of the 2012 Health and Social Care Act, essentially require all NHS services to be put out to competition unless there is only one provider capable of delivering them.

As Clare Gerada, Chair of the Royal College of GPs, has pointed out, with these changes the legal framework for a publicly provided, publicly managed, publicly planned and democratically accountable health service has been removed.

At a UK level, the only solution to this situation now is for an incoming Labour Government to reverse comprehensively the 2012 Health and Social Care Act and associated secondary legislation. But we must also go further and seek to re-examine and eliminate the purchaser / provider split wherever we can and in whatever timescale is feasible.

Against this background it remains important in the meantime that we are vigilant about European Union legislation that can impact negatively on our public services, health included.

To give one current example, the Department of Health is currently consulting until 24 May on the draft NHS (Cross-Border Health Care) Regulations 2013.

Although health services are largely excluded from EU competence, there have been moves for many years to try and open up the single market approach to healthcare provision, and to let in more competition by private providers based in other member states.

EU citizens already can obtain European Health Insurance Cards to ensure they can get urgent medical treatment when in another member state. So far, so good.

And the new draft Cross-Border Health Care Regulations are aiming to bring into force a 2011 EU Directive that gives patients ostensibly reasonable sounding rights to access planned healthcare treatment in other European countries.

But in reality, the Regulations do little more for patients than clarify rights in existing EU legislation and case law. They certainly do not address the problems of widening health inequalities within the EU, and the fact that those from poorer countries will still not be enabled to access much needed specialist treatment elsewhere.

And buried in the impact assessment accompanying these official regulations (at p.23), there is a section explaining the real drivers. This section emphasises the potential for increasing competition amongst UK and EU healthcare providers and diversifying income streams for domestic private providers.

It is vital that Labour and other concerned campaigners lobby to get the regulations changed so that the Directive is brought into effect in the least damaging way possible. One option would be to argue that prior authorisation procedures should have the highest possible safeguards against funding private treatment overseas and it should not be authorised unless the NHS is incapable of providing the required treatment.

In the longer term, these regulations illustrate yet again that Labour and Socialist MEPs must work together to change the basis of the EU attitude on public services to one of solidarity and fair access for citizens and not as a market for companies to make profits.

Lucy Anderson is a Labour MEP candidate for London and a member of Labour’s National Policy Forum Health and Care Commission