Workplace & Trade Unions

Royal Blackmail: don’t give in to company threats

01 May 2023

By Andy Young, CWU rep, pc

BEFORE THE agreement was reached, Royal Mail bosses claimed the company was on the verge of bankruptcy and threatened to put the company into administration if the CWU didn’t do a deal.

Unbelievably the CWU leadership gave into this blackmail and signed up to the current agreement that cuts workers conditions to restore profitability. The opening pages of the deal explicitly link its provisions to restoring profits.

The head of London CWU, Martin Walsh, defending the deal, has echoed this. He argues that further strikes would have worsened Royal Mail’s situation, forcing them to impose worse cuts than those proposed in the agreement, or go into administration meaning “thousands of jobs would be lost which are not linked directly to the USO.”

In another post (which received hundreds of angry responses from postal workers) he said “Those who claim that the government will bail us out are only partly right. They would have continued with the USO but everything else including parcels, LAT, CSPs etc would have likely ceased causing thousands of immediate job losses with only Statuary redundancy pay available.”

This is not necessarily true, nor is it realistic.

If we vote no will the company go bankrupt?

First off, we don’t know the real financial position of Royal Mail and we won’t until the strike is over, and they come to an agreement with workers.

Secondly, to accept the agreement means rewarding bosses for stripping out half a billion in profits last year, and then forcing us to strike in the run-up to Christmas and paying competitors to take over profitable parcel deliveries and paying through the nose for agency staff in order to break a strike they provoked.

Thirdly, is it really believable that a company which was profitable (to the tune of £100s of millions) before the pandemic, and delivers more parcels than ever, is actually in the red under normal conditions? 

Ultimately it means giving in to the Royal Mail board’s policy. Royal Mail’s international holding company IDS is profitable, and deliberately ringfencing its UK operation to award profits earned abroad to shareholders, and put pressure on the workforce. That is a deliberate policy, and one we should not bend the knee to. Royal Mail profits were used to acquire the international assets in the first place, they were happy to link the operations then!

Open the books

We have no reason to accept management’s claims at face value. Open the books and let’s see the real state of the company. If it is unviable as a profit-run company then renationalise it.

The truth is, it should be renationalised anyways. Promises about privatisation bringing in much needed investment into the company were always a con: they’ve taken out nearly £2 billion in profits over 10 years.

The £670 millon in profit made last year could have been used to modernise the company from top to bottom. We could replace every van with a green electric van, insulate the offices properly to cut down on heating, and get some new work boots without having to wait for months!

Whatever the true state of the company’s finances, the hard truth is that Royal Mail cannot be both a well-run company providing a vital public service, with decent terms and conditions for its employees and a cash-cow for billionaire shareholders.

Like all the other public services that have been privatised—from water to energy—dividends have far outstripped investment, and the result is a worse service, that costs users more, provided by workers whose pay, conditions and pensions have been cut to the bone.

Royal Mail should be renationalised, without a penny in compensation to the profiteers.

“But the Tories would be worse!”

The argument that a publicly-owned Royal Mail run by a Tory government would be worse than the current private management is a common one put by officials pushing the deal. But it’s hard to see how they could be.

They were forced to grit their teeth and nationalise Liberty Steel two years ago when it went bust. The East Coast Mainline is run by a public company after private operators walked away.

A big motivation for privatisation was that it is politically much more difficult for a government to carry out the kind of destruction of a public service that private owners can justify by the need to boost profits. Profits generated by a nationalised company get reinvested into the service, or help support other government spending—in a private company, they buy yachts or pile up in tax havens.

So renationalising Royal Mail and then slashing the USO would be politically difficult even for the Tories, as would splitting off the parcels operation as Martin Walsh says. Those new parcel hubs were paid for by Royal Mail profits over the years, and the government can’t be seen to deliberately make it unviable and unprofitable—if there is a high-profile campaign, linked to strike action, to renationalise it. 

At present, Rishi Sunak can stand back in the shadows while the billionaire Kretinsky and his puppet Simon Thompson slash and burn our terms and conditions—“nothing to do with me, guv”. 

But that changes once Sunak is on the hook for it. If we fight, it becomes a political problem for the Tories to be seen slashing the USO or smashing a union.  

Would people support us though?

People say that Royal Mail and a delivery system just aren’t popular enough with the public anymore or needed. But that’s not true. The rest of the trade union movement would certainly support us, if we fight.

An August 2022 poll by Survation showed 68 percent of the public think Royal Mail should be renationalised. A campaign for renationalisation, which is the CWU’s policy anyway, would be widely supported, because what used to be a publicly owned service has been sacrificed for profit and bankruptcy would make that crystal clear.

If we won then renationalising the railway, throwing the vultures out of the NHS, taking control of the profiteers hiking energy bills and dumping sewage into our rivers, would look like real possibilities and be the logical next steps.

The idea that renationalisation under a Labour government is more likely, or Keir Starmer would be nicer than the Tories, is just a mirage. He wouldn’t do that without massive pressure. The fact that Royal Mail says it is nearly bankrupt and unsustainable now creates the strongest pressure for its renationalisation.

And the argument that Tory renationalisation would be automatically worse than the outcome of the current deal is understandable but not true. Rather than giving into a ruthless company management that will just come back for more, the CWU can struggle against any Tory attempts to downsize the USO or our terms and conditions in a renationalised company, and build a solidarity movement around us.

But that relies on CWU leaders dropping their strategy of cutting deals with management, collaborating in restructuring, and downsizing our pay, terms and conditions, and instead fighting for union policy—renationalisation.

And that in turn relies on the rank and file of the union becoming organised so it can push for such a change of direction and rebuild our power to carry it out, from the shopfloor up.

As socialists we would go further. The company should be nationalised without a penny given to the fat cats who have stripped out assets and profits and brought the public service to its knees. There should only be compensation for the small shareholders, and the postal service should be run under the democratic control of workers and consumers.

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