CWU - Communication Workers Union  •  Industrial

Royal Mail bosses line up to cut public service

28 September 2023

After months of residents complaining about letters going undelivered for days or even weeks, and workers leaking photos of frames full of undelivered mail, the regulator Ofcom has declared a review of the Universal Service Obligation.

The USO is a legal obligation, held by Royal Mail, dictating quality of service requirements. For instance, 93% of first class letters to be delivered next working day, and a six day letter delivery Monday to Saturday to every address in Britain no matter how farflung or rural.

Royal Mail bosses, determined to convert the company into a parcel operation, have used last year’s powerful 18-day strike by postal workers as an excuse for their failures. Company propaganda was still citing the effects of the strike for failed deliveries this summer, when the last strike date was the previous December! Now the Tory government are trying to make the argument that the USO is the problem, aiming to help bosses cut it along with 10-20 thousand jobs, while hiking workload for the remaining workers.

A long time coming

Like the NHS underfunding crisis, where public anger is used to justify market-based “reform”, the aim is to use the crisis to impose changes favouring shareholders and profits. Royal Mail want to cut the USO and restructure into a parcel company, which also helps weaken the CWU postal union, hike workload and embed a two tier workforce. The result will not be a better service but more profits for shareholders in both cases.

It’s no secret that, since the 2013 privatisation, Royal Mail bosses have wanted to cut the USO to boost profits and turn Royal Mail Group into a multinational parcel giant. The long-term shift in the postal market (rising parcels, falling letter volumes) means they have increasingly turned to building a parcel operation in the UK too, while deprioritising letters delivery.

Now the CWU has agreed to help build a Single Large Parcel Delivery Network over the next two years, as part of the Business Recovery, Transformation and Growth Agreement (BRTG) finally signed off this July, increasing the dangers to the USO. Under threat of the company declaring bankruptcy, union leadership under general secretary Dave Ward threw in the towel for this rotten deal agreeing a two tier workforce, cuts to terms and conditions, and workload hikes, then browbeat and bribed the membership into voting for it. These measures are aimed at restoring Royal Mail to profitability by slashing staff and leaving letters undelivered, while the company is also shaking down the public by hiking stamp prices to £1.25 this year.

Bosses blame workers

Royal Mail bosses can find the funds to build massive parcel hubs like Warrington to support this parcel network, but haven’t delivered letters to the USO spec for years since the covid crisis, when parcels revenue finally overtook letters revenue.

Many workers report that their office has not completed deliveries, breaking legally-binding USO commitments, for the last four years. This spring revisions (office level restructurings) were imposed that slashed walks and made the problem even worse, effectively institutionalising delivery failures. The national policy has been to fail USO letters on a daily basis to save money and focus on parcels, using Ofcom loopholes as well as falsifying statistics provided to the regulator to hide this from the public.  

Ex-CEO Simon Thompson claimed Royal Mail was bankrupt in Autumn last year, after handing most of a £760 million profit earlier in the year to shareholders and board-members – precisely the amount of the deficit reported in May this year ( £748m). This crisis was manufactured to save those profits for dividends and bonuses, push for cuts to the USO, and blackmail the union into dropping the strike and agreeing restructuring.

The pro-market, rightwing regulator Ofcom, politely termed a “soft-touch” even by pro-business journalists like the Gaurdian’s Nils Pratley, has enabled this for years. It’s 2022 investigation into Royal Mail’s failure to restore letter deliveries after the end of lockdown a year earlier found nothing to answer. Throughout the 2022-3 dispute it gave Royal Mail a pass as local papers were full of residents complaining of no deliveries for days or even weeks.

The Tory-appointed head of Ofcom, Lord Grade of Yarmouth, hardly a man of the people, will protect the bosses first not the public It is widely understood that Ofcom’s launch of a review means cutting the USO by at least one day to make it “sustainable”, and “help” ensure a better service Monday-Friday. As any postie can tell you, as well as the frames full of undelivered letter in August, the quietest month of the year, Royal Mail still won’t be able to deliver the USO with a five-day service.

Union leaders’ undermine the USO

In 2022 nearly 8 billion letters were delivered to 32 million addresses, including NHS appointments, bank cards, and magazines. Many poor, elderly and vulnerable people are not able to go online as an alternative. The USO is still incredibly important and the expansion of parcels should be used to support it. Royal Mail’s strategy is to create a casualised, cheap delivery service and slash both the USO and unionised workforce. That means a worse service for the public and higher profits for the bosses.

You’d have thought union leaders would easily be able to show how a “bankrupt” Royal Mail failing the USO for four years completely discredits privatisation, and focus public anger on the company and government, building on polls showing public support for the strikes and for Royal Mail renationalisation.

Instead CWU top Dave Ward has shelved union policy for renationalisation, arguing workers must help make a private Royal Mail “a success” and giving into Royal Mail’s bankruptcy blackmail. Besides initially allowing the revisions imposed by Royal Mail and then pushing the rotten agreement, Ward has actually started musing in public to cut the USO, to save jobs. In a June video update, he stated that cutting the USO is “a fair debate for us to be having now”, and “I think we are coming to a moment where we may have to consider the five-day scenario”:

“The executive has been talking about it we want to sustain the universal service and we’re going to have to have a debate about what is the best way economically to do that and the Tipping Point comes if you’ve got declining letters over six days there’s going to be a moment where it may well lose more jobs over six days than it would if you went to five days and condensed those letters into those five dates… it may well be the right time to change”.

Ward has repeated this many times, hoping to get Labour signed up to this limited cut to the USO (in some European countries it has been gutted to 2-3 days a week) and to filling out the job of postal workers with other tasks such as delivering prescriptions and looking in on the elderly and vulnerable. He insists that Royal Mail is signed up for this in the agreement, but they have shown no real interest in this. They want to cut it further, not save it, and build a parcels company as agreed in the BRTG.  When this has been built or when the BRT&G agreement runs out in 2025, whichever comes first, they could simply use the threat of bankruptcy again to force further cuts to jobs, conditions and the USO itself. 

There has been no public dissent from union officials of any wing of the bureaucracy, which is a chocolate fireguard when it comes to defending jobs or the USO! Workers need to organise at the rank and file level to fight restructuring on the shopfloor, including the unorganised new worse-paid workers. That means challenging the agenda of the CWU leadership, from the new agreement to defending the USO and renationalisation.

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