The National Audit office reported in April that the privatisation of Royal Mail short-changed taxpayers by £1 billion. If that were not bad enough, 16 institutional investors given priority by the government in the queue for shares sold them within weeks despite having led the government to believe that they would hold their investments for the ‘long term’. As if! Such is the culture of short termism pervading capitalism in general and the City of London in particular, such understandings are worthless. Nothing gets in the way of making a quick buck.

Given this blatant rip off at the time that ‘our’ Royal Mail was sold off, who can now be surprised to learn that one of the jewels in the crown of Royal Mail, the former Mount Pleasant sorting office, is to be sold for an estimated £1 billion for luxury housing. This helps explain some, but of course not all, the jump in share price immediately following the flotation. The flotation price was supposed to reflect property development value, but the ruthless way in which this asset is to be exploited could not have been fully reflected in this price.

At a time when Londoners are being priced out of the property market, the Mount Pleasant site could have made a small but significant contribution to London’s stock of genuinely affordable properties. Royal Mail has, however, as a public company, only one overriding objective, enshrined in statute, which is to maximise shareholder value. This means minimising the proportion of affordable homes in the development – fewer than a quarter of the homes fall into this category, reflecting the minimum needed to secure Mayor Boris Johnson’s approval of the development – and maximising the interpretation of what is meant by “affordable”. A two bedroom “affordable” home in this development is currently expected to cost around £1,700 a month, or £20,400 a year. Assuming renters/mortgage payers can afford to pay no more than a third of their pre-tax income on accommodation, a couple would need a combined income of £60,000 per year to afford this “affordable” home. A couple both working 40 hours a week for 50 weeks a year for £8.85 per hour, the London Living Wage, which is better than many earn on the statutory minimum wage of £6.50 per hour, would together earn only £35,400 a year. Their mortgage or rent would consume 58% of their combined income – clearly unaffordable.

The solution? Simple! Re-nationalise our public services at no more than the prices they were sold off for; and public investment in decent homes for all.

A message for Mr Cable

Vince Cable, the Lib Dem Business Secretary, likes to appear mildly progressive in his public utterances, no doubt in the vain hope that we will forget that he and his party will have kept the most rabid Tory government in living memory in power for five years. It was therefore somewhat surprising when, in response to a question from Labour in parliament last week, Mr Cable was largely dismissive of the mildly progressive idea put to him that publicly listed companies should be required to disclose in their accounts the number of employees who are paid less than the living wage. He said he would think about it but added that he was against “coercive measures because these would simply add to unemployment”. Massaging downward the headline figure for unemployment and disregarding the consequential increase in welfare costs – or better, capping them and making the recipients pay – is, of course, a key strategy for the Tories: a strategy that the Lib Dems have gone along with.

The living wage rate is currently £8.80 per hour in London, including Croydon, and £7.65 per hour elsewhere, compared with the minimum wage of £6.31 per hour for those aged 21 and over.

As I mentioned last week, Croydon TUC was calling on candidates in the forthcoming local government elections to commit to ten key policies if elected. One of these policies is that Croydon Council should pay the London Living wage to its staff and insist on its sub-contractors doing the same. While candidates from other parties appear to have ignored the call, Communist Party candidates in Croydon warmly took up this commitment. As communists hoping to be councillors, they recognise that the powers available to elected councils are limited, but a start can be made in the Council Chamber towards building a fairer society. Paying the London Living Wage for council employees, both direct and indirect, and removing such restrictions on employment terms under local government services as not paying carers for their travelling time, represent such a start. As communists, however, these candidates appreciate that tinkering with capitalism cannot bring about the fundamental change they seek. Fair pay for all is the objective, and it cannot, unfortunately, be achieved in the forthcoming local government elections on 22 May, whatever the results. Fair pay for all cannot be achieved without the “coercive measures” feared by Mr Cable, but it does not involve unemployment. It’s a system called socialism, Mr Cable. Try thinking about that!

Martin Graham