So much for Gordon Brown's claim in November that "old free market fundamentalism, no matter how it is dressed up, has been found wanting". The publication of Richard Hooper's report on the future of Royal Mail, "Modernise or Decline", suggests that part-privatisation is well and truly on the cards.
Business secretary Peter Mandelson has confirmed that the government will accept the report's recommendations.
Private mail handlers TNT have already expressed an interest in buying up part of the service, while the government has accepted taking control of the £280 million "large, growing and volatile" pension fund deficit. Selling off chunks of the industry will not go down well with Communication Workers Union (CWU) members, who were set to strike on 19 December over the closure of offices in Stockport, Bolton, Oxford, Crewe, Liverpool and Coventry.
The report states that industrial action occurs too often and has been one of the reasons for the decline in Royal Mail profits. But the Hooper report attacks may encourage many workers to argue for further strike action. The CWU also has a policy to ballot members on the union's link to the Labour Party, should privatisation be announced.
CWU general secretary Billy Hayes said, "Mandelson has ignored the damage done through irresponsible liberalisation and advocates more involvement by private companies."
Mandelson has stated previously that Royal Mail should be "progressively private, even if initially part of the company stayed in the government's hands". This is despite the 2005 Labour manifesto stating that "we have given the Royal Mail greater commercial freedom and have no plans to privatise it".