SPECTAT THE OR
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STAMP OF WEAKNESS
It comes as no surprise, in the present puerile political climate, that Mr Michael Heseltine is having trouble persuading his own backbench colleagues of the merits of Post Office privatisation. It should, howev- er, certainly be a cause for reflection.
The Post Office is a business; businesses should not be run by governments; privati- sation is one of the most successful policies ever pursued in Britain, and the only aspect of our present administration which is widely imitated by foreign governments, from Kazakhstan to Chile. And yet privati- sation in Britain seems to have returned to the position it occupied in the public mind in the earliest period of the Thatcher gov- ernment, 15 years ago: a cause for fear and suspicion, rather than the widespread enthusiasm which its record now merits.
Of course, the turncoat backbenchers would have us believe, the Post Office is different. Unlike most other public services, it is popular and reliable; it may even be efficient, and therefore deserves to be left alone. It has all those nice elderly sub-post- mistresses and letterboxes in quaint loca- tions. Unlike a real business, it provides a universal service at a universal price. And — somehow proving it to be outside the realms of commerce — it has the right to print Her Majesty's head on every stamp, a matter which provokes much fiercer expressions of loyalty than her unfortunate family could nowadays hope to receive in person.
But most of this is sentimentality of the sort which, a decade ago, prompted dukes to make speeches about the threat posed to rural telephone-boxes by the privatisation of British Telecom. Today there are more public telephones than there ever were before, almost all of them in working order, and calls are 30 per cent cheaper in real terms. The telephone industry works under the constraint of providing a universal ser- vice, but we have seen vividly over recent years how much better it performs if it is also open to competition. The nature of the postal service and net- work are largely safeguarded by the Hesel- tine proposals. Meanwhile, competition from courier companies is already nibbling away at the Post Office's market, while the Post Office itself, trapped by the limitations of Treasury funding, claims that it cannot respond adequately without access to pri- vate sector capital. And the Queen's con- nection with the business of delivering let- ters is really no barrier to privatisation at all: it is only slightly more meaningful than her connection with Baxter's Royal Game Soup. 'Royal Mail', on the other hand, is a hugely valuable brand-name, even now, especially for an international business. It is true that, along with rail and coal, the Post Office falls into a more difficult category of privatisation than the early tri- umphs of the programme, like British Steel and British Airways, companies which were already operating in competitive markets and were rapidly revived by the adrenalin of free-enterprise management. But of the remaining cases for treatment, the Post Office is in many ways the least intractable. Communications of all kinds is a business with wonderful prospects, unlike coal-min- ing which is an industry struggling to sur- vive vertiginous decline.
The Post Office may need new invest- ment, but it is not burdened with half a cen- tury of chronic under-investment such as afflicts the railways, which can only be pri- vatised by a complex process of fragmenta- tion offering no promise of improved ser- vice to travellers. Mr Heseltine's Post Office proposals have had to be fudged this week (reducing the portion for public sale from 51 per cent to 40 per cent and intro- ducing a 'trust' to represent the interests of staff and sub-postmasters) not because there are overwhelming difficulties peculiar to the postal service, but because of an evaporation of political will.
The public has evidently been allowed to forget the beneficial outcome of privatisa- tion for entities like Rover, Cable & Wire- less and National Freight, or the improve- ments in value for money from local gov- ernment brought about by 'contracting out', of how long it used to take the gas board to answer the phone. The benefits of wider share ownership, the most important side- effect of privatisation, are now dismissed as 1980s rhetoric.
Instead, privatisation is thought of in terms of 'profiteering' water companies and of public servants who would like to quadruple their salaries, as Mr Bill Cock- burn of the Post Office would have to do to catch up with his former colleague, Sir Ian Valiance of British Telecom. It is thought of as a process which destabilises much- loved institutions in the interest of political dogma. But this is a wild distortion of the truth, which is that privatisation has brought stupendous — and essential - improvements to many aspects of British industry and daily life, and that the state- dominated portion of our economy is still far too large. It is an astonishing failure of political communication that the govern- ment should have lost this initiative.
If ministers cannot manage change even within the framework of their own most suc- cessful policy idea, proven in action over 15 years, then they no longer deserve to govern.
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