Liberal Democrats honour a manifesto commitment?

With Radio 4 describing the Royal Mail privatisation as reminiscent of Thatcherism, I thought I would check what each party said in their 2010 manifestos. You may recognise a recurring theme here: I think that parties should stand by their commitments to the electorate. As I previously pointed out here, when Stanley Baldwin as Conservative Leader and Prime Minister concluded that the Government’s policy needed to change from what they had offered at the election the previous year, he called another election.

When Welsh Labour entered a coalition with Plaid Cymru in 2007, it was based on comparing the two parties’ manifestos, implementing the things they agreed on and compromising on other issues. Not everyone was happy with the results (it was a bit harsh on the badgers for example) but at least it had a clear basis. In 2010 the Liberal Democrats negotiated on the basis of ditching their own manifesto and doing stuff the Tories wanted to do – regardless of whether or not they had mentioned it in their own manifesto. The most glaring example is this quote from the Lib Dem manifesto:

If spending is cut too soon, it would undermine the much-needed recovery and cost jobs. We will base the timing of cuts on an objective assessment of economic conditions, not political dogma. Our working assumption is that the economy will be in a stable enough condition to bear cuts from the beginning of 2011–12.

As an experiment, doing the precise opposite of this proved a point – the growing economy which they inherited ceased to grow and the cuts were therefore self defeating, with revenues dropping by a similar amount to the cuts in spend and the deficit remaining at a similar level.

So what about Royal Mail privatisation? Much to my surprise, although the Conservatives didn’t say anything about privatising the Royal Mail, the Liberal Democrats did. They said they would:

Give both Royal Mail and post offices a long-term future, by separating Post Office Ltd from the Royal Mail and retaining Post Office Ltd in full public ownership. 49 per cent of Royal Mail will be sold to create funds for investment. The ownership of the other 51 percent will be divided between an employee trust and the government.

So there is a partial mandate for what is happening – but not for the detail. The government stake may end up being as little as 30% while 10% of the shares will be allocated to eligible employees. So between them, employees and the Government will hold a minority stake not a majority stake. And there is a very significant difference between an “employee trust” and employees holding shares – it is about collective bargaining power. Middle-men will make lots of money from commission on the shares which are traded but the sale is bad news for the public and for employees.

There is no mandate for what the Government is doing as well as it being a bad idea in its own right.

Royal Mail is a profitable business. As a privatised company, it will be a dominant player in the market. In these circumstances, there needs to be a tight regulatory framework. Far better, as the CWU have argued, to establish Royal Mail as a ‘not for dividend company’ with profits reinvested back into services and the workforce, operating for the public good, balancing its social obligations with commercial opportunities. If the primary motive for privatising is to enable it to raise capital, such a model would be much more effective.

The Labour 2010 manifesto is worth re-reading:

The Post Office has an invaluable role to play in our communities and in serving local businesses. To promote trusted and accessible banking, we will transform the Post Office into a People’s Bank offering a full range of competitive, affordable products. This will help sustain the network and boost competition in banking. The universal postal service delivered by the Royal Mail connects and binds us together as a country. We are firmly committed to the 28 million homes and businesses across the country receiving mail six days a week, with the promise that one price goes everywhere. The Royal Mail and its staff are taking welcome and needed steps to modernise work practices. For the future, continuing modernisation and investment will be needed by the Royal Mail in the public sector.

A sensible approach which remains sensible today.


2 thoughts on “Liberal Democrats honour a manifesto commitment?

    • There is a lot of cynicism, which is very dangerous: if we cannot settle things through democracy the alternative is what’s going on in Syria at the moment. We desperately need politicians to be honest and to do what they said they would. It was astonishing that Nick Clegg’s apology was for promising to do something he had no intention of doing if elected rather than for breaking his promise. How he can carry on in those circumstances is beyond me – but I guess he doesn’t share my view of how important electoral promises are.

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