The Family Silver

John Harris writes:

Come trade unionists, lefties inside and outside the Labour party, disillusioned Lib Dems, Ukippers, and any Tories still fond of the idea that there are some things – the "family silver", as old-school Conservative mythology would have it – that perhaps should not be handed to the private market.

This wretched government is now selling off Royal Mail, with the aid of a syndicate of banks headed by those well-known guarantors of the public interest, Goldman Sachs and UBS. The financiers will take home around £30m; over time, the rest of us will likely end up with a threadbare postal service, and the feeling that we were robbed, in broad daylight.

Towards the end of Labour's time in office, the then business secretary Peter Mandelson floated the "progressive" sell-off of Royal Mail, and soon proposed its part-sale to a private partner, only to be faced with huge opposition within what remained of the Labour movement, and a shortage of any credible bidders.

While the Tories advocated a complete sell-off, the Lib Dems revived the part-privatisation idea in their 2010 election manifesto, saying that, given the chance, they would sell off 49% of the service, and split the rest between the state and Royal Mail's employees.

A mention of all this was included in the coalition agreement of May 2010, and on Wednesday Vince Cable will come forward with firm plans. Strangely, they seem very different from what his party originally proposed: in the wake of a recent doubling in its profits to £403m, the whole of Royal Mail is expected to be floated on the stock exchange, with only 10% of shares set aside for its workers.

There is talk of a "tell Sid"-type pitch to the public: further proof, perhaps, that we are largely being ruled by people who seem to think that modern government should amount to a school play about the Thatcher years.

All this was set in train by the Postal Services Act of 2011. Then, as now, there was a surprising lack of noisy opposition to what the government was up to. The Communication Workers' Union did what it could, and has continued to put its muscle behind a campaign called Save Our Royal Mail.

But perhaps the constant chipping away of the postal service – the halving of deliveries in 2004, the accelerated closure and outsourcing of post offices – created the impression of something long degraded and ultimately doomed. This, needless to say, is not true: buoyed by booming use of parcel post, the organisation recently announced that its annual profits had doubled, to £403m. Its internal workings have been modernised, and the government has soaked up the deficit that opened up in the course of a mad 13-year pensions holiday that began in 1990.

Yes, there are claims that a need for more investment can only be met via privatisation, but this is baloney: as the CWU has endlessly pointed out, Network Rail is effectively a public body, and it has borrowed amounts on the private markets far in excess of what Royal Mail requires.

By way of cold comfort, there is an "inter-business agreement" between Royal Mail and the newly separate Post Office that will keep the two tied together until 2022 – but after that, who knows? The government is keen to assure us that it would take fresh legislation to move away from the Royal Mail's universal service obligation – essentially, the guarantee that post will be collected and delivered six days a week, wherever you are. But again, won't any private set-up soon tire of all that and put pressure on ministers to legislate for a much looser, profit-friendly arrangement?

Overall, it's very instructive to read about privatisation and liberalisation of the post in such European countries as the Netherlands: there, the story is of a downgraded and demoralised workforce, and four different post companies (branded orange, blue, yellow, along with the "half-orange" firm founded by the owners of the orange one, seemingly to drive down wages and conditions) competing to nobody's great benefit, including their own.

Anxiety about all this, thankfully, is by no means confined to the usual suspects. The central role in all this played by the EU directives has incurred the wrath of some Conservatives, and plenty of Ukip activists. And consider the line on privatisation so far taken by the Tory Bow group, whose views have been stirringly voiced by its chairman, one Ben Harris-Quinney.

Privatisation, he says, "is likely to be deeply unpopular with the British public". And there's more: "Prices will rise at a time we can least afford it, an amenity that many communities consider crucial will be removed and a sell-off will also impact on the significant heritage of Royal Mail." He predicts "a poisonous legacy for the government now, and a poisonous legacy for the Conservative party going forward".

Underneath those words – it's there in the use of "heritage" – is an argument that is as much cultural as economic. There are, surely, some parts of our socioeconomic patchwork that embody an enduring sense of the country we are, and certainties that should be kept well away from the hurly-burly of international capital. The Lib Dems seem to have no clearer sense of that than of anything else.

But the spectacle of the Conservative party setting Royal Mail – the Royal Mail! – off down such an uncertain path screams huge truths about what Margaret Thatcher destroyed in their politics, and they have never rediscovered.

This sell-off may not be attracting much attention, but within it, there lies something remarkable: conclusive proof that, however much the Tories still bang on about patriotism, on close inspection, their claims to it disintegrate, like a tattered flag.