Friday, August 05, 2005

Orange (Book) Marching Season

The Liberal Democrats are very good at whipping up a campaign storm on local issues - mobile phone masts and post office closures are classic examples. Great local vote-winners, so all the more surprising to see them proposing to privatise the post office.

This isn't anything new - a policy paper entitled 'Setting Business Free' mentioned that the Liberal Democrats
'are increasingly coming to the view that a privatised Post Office... on Dutch lines could have a better chance of succeeding than the current structure'

Although this paper was passed by a LD conference and therefore becomes party policy, that particular nugget was missing from the 2005 manifesto for some reason - must have been a printing error. I mean - they wouldn't want to hide an embarrassing proposal, would they?

Now, we need to remember that the Post Office closes branches for commercial reasons - they aren't working as a business - not because they are intrinsically evil. Once you sell it off to investors, the Post Office then has a duty to maximise the return for the shareholders (who will be the big investment houses, as the mass of private investors will sell out to them in due course, just as they did with the other big privatisation deals in the 80s). Does that make it more or less likely to make decisions that may make commercial sense but will offend local sensitivities? Answers on a postcard please to the usual address.

Post office branches close largely because people don't use them. One of the biggest changes in recent years has been a move to pay benefits directly into bank accounts, rather than through payment books. This system was always vulnerable to theft and fraud and direct payment makes that much more difficult. There's always the complaint about the elderly preferring cash. This is true, but you also have to note the changing demographics - the first generation to have been mass users of credit cards and ATMs are now heading into their twilight years. More and more retirees are happy to see their money paid into a bank account - they've had wages and salaries paid that way for years and don't want to traipse down to a cold, windy post office counter to collect their money. That's not to say we don't need imaginative ways to keep the public service offered by these post offices going in some way, but we do need to appreciate that the market is changing.

The progressives in the party are on the march again. That's the same bunch that want to remove the DTI, deregulate like it's going out of fashion and ensure that business has a say at the cabinet table (no mention of the workers, strangely). Curiously, they wanted to combine the role of a 'Minister for Business' with that of the Chief Secretary to the Treasury. Now, call me dense here, but is it wise to combine the tasks of a minister in charge of government finance and taxation with that of someone whose job it is to act as an advocate for business - who would lobby for low corporate taxes?

Like most LDs, they want to be all things to all men.

They promise to extend the rights of workers without imposing extra costs on businesses.

They recognise the right to strike, but also insist that key services (unspecified) should be kept working, even if the government has to impose binding arbitration on both parties.

It just can't be done. To my mind, the role of government is to regulate the market and to ensure that people are looked after - corporations are very good at taking care of themselves.


Anonymous said...

Sounds as if you are writing your own book. What are you going to call it-'The General Theory of Employment,Taxation and Markets'?

john said...

Much that I am not a great fan of the proposals being put forward, you have also misunderstood them.

It is quite clear that the sub-post office network controlling entity (previously called Post Office Counters Ltd) should remain within the public sector.

The main reason for closures has been the administrative problems at the centre anyway.

Personally I would keep the USO (Universal Service Obligation) within the direct control of the public sector. I don't think indirect control via a regulator is sufficient for service.