Since the financial crash, Gordon Brown’s herculean efforts have once again revived his political fortunes. From being written off, Labour is back in the political game. There is everything to play for in 2009. But all this is being jeopardised by the proposal to privatise the Royal Mail. If the government goes ahead, it will be the biggest political battle of the year.

There will be massive political and public opposition to this unnecessary policy shift. There was known to be disquiet all around the table when the decision was debated at the last cabinet meeting of the year. At least 100 Labour MPs will mobilise against any form of Post Office privatisation. The Labour whips are very uneasy about the prospects of having to confront such a large-scale and heartfelt revolt. And unlike Tony Blair, Gordon Brown won’t want to have to rely on opposition votes to get such a controversial measure through. But as things stand, this will be the least of his worries.

Because opposition won’t be confined to Labour’s ranks. Rural Tory MPs will come under enormous pressure not to sign the death warrant of their village postal stores, and many Liberal Democrats will find it hard to hold their noses and back such an unpopular proposal that will be top of the agenda in hundreds of marginal seats.

A national consensus will form around the future of a wholly publicly owned Royal Mail. It has a peculiar hold over the emotions of the British nation. In its queues we are all equal, through its delivery we don’t just stay in touch with loved ones, but somehow we hold the fabric of the nation together. That is why it won’t just be the unions who staunchly oppose privatisation but users, small businesses, environmentalists and myriad other communityand rural interest groups. Even Margaret Thatcher refused to go near the Royal Mail.

There is another factor that should weigh heavily on Brown’s mind. We know he worries intensely about the strength of our feeling of Britishness in a fast globalising world. But there is no more potent symbol of our national identity than the Royal Mail. Its sale to the highest foreign bidder will be another self-imposed nail in the heart of our national identity. And if it is a mistake for Brown, it is also an unusually maladroit political calculation by Peter Mandelson, whose so far successful return to the political fold is also put in jeopardy by this unwanted and unnecessary policy announcement.

But let’s face it. The standard of postal services is not good enough, despite the hard work of many postal workers and counter staff. It’s not surprising. For more than a decade the management has been preparing for a sell-off rather than investing in better quality services. Private-sector innovation should be welcomed, but in this case it needs to be put to the services of all the people of the country, not the profits of a few.

So the government is right; the status quo is not an option, but neither is privatisation. Royal Mail and the Post Office network need modernisation not marketisation. The free market in financial services has failed the nation. We know that the big banks were making profits from toxic debts, but won’t now extend much needed credit to private or commercial customers. A People’s Bank, based on the Post Office network, could offer a safe haven of full banking services to everyone in the country. Backed by the government, it could lend to households and small businesses and could take on new services such as delivering the Child Trust Fund and the Saving Gateway. It would be a new public institution at the heart of every community. The Royal Mail could innovate with new services such as later deliveries of parcels if there was no one in the first time.

The government is calling it part-privatisation, but is proposing to sell off as much as 50% of Royal Mail to whoever thinks they can profit from it most. The investors will want their pound of flesh. The most profitable services will continue to be cherry-picked. At the moment the Royal Mail and the Post Office form a complex web of interrelated parts. Cross-subsidies allow loss-making services to be continued. The whole thing works as an organic entity. Any level of privatisation will change all this. Poor and rural communities are bound to suffer. But we don’t demand the police or ambulance services make a profit or threaten them with privatisation. So why the Royal Mail?

Big politicians like Brown and Mandelson know when they have made a mistake. The political winds have changed. It is now the frontiers of the market, not the state, that are being rolled back. Royal Mail and the Post Office are trusted public institutions whose time, if they are properly modernised, has come once more. It would be tragic to break them and the unity of a reviving Labour party on the rocks of the failed politics of privatisation.

Neal Lawson is chairman of the centre-left pressure group Compass

www.compassonline.org.uk

Times Recommends

• It’s the beginning of the affair
• Afghanistan: still a price worth paying
• Heroes of the downtrodden