Workplace, Trade Unions, Strikes

Royal Mail threatens to break up company if workers strike

20 July 2022
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Postal workers and the public should reject Royal Mail blackmail

By Pete Thompson

On Tuesday 19 July, the CWU union reported that a resounding, even historic 97.6% of its postal worker members in Royal Mail had voted in favour of strike action over an insulting 2% pay rise imposed by the company. A second ballot is on the way over sweeping attacks to terms and conditions by management.

The following day at the company AGM chairman Keith Williams stated the company was making a loss of £1 million a day. He threatened to break up the company if workers didn’t accept those changes.

Postal workers worked through the pandemic to deliver mail and were applauded as key workers. Now they are being thrown under the bus. They should reject this blackmail, vote yes in the second ballot, and insist that strike action is brought forward to show they are serious.

A public service?

The public should be outraged that, after the privatisation of Royal Mail, a well-liked public service and quasi-national institution, the company has been cynically used as a basis to construct an international parcel delivery operation called GLS, often on terrible wages and conditions.

Like a parasite that has outgrown its host, they now want to cut this loose into a separate international operation (at the behest of billionaire Daniel Kretinsky, who owns 22% of Royal Mail, and other millionaire shareholders) and use this separation to put Royal Mail into a profits squeeze.

This will not be the start of a better Royal Mail, but a crucial point in its conversion from public service to just another parcel delivery company, with the same rotten terms and conditions – and pay, as the current offer shows – as the rest of the sector.

Whatever happens with this strike, it is only a matter of time before Royal Mail bosses start lobbying for a cut to the Universal Service Obligation that means they must deliver letters to every address, no matter how remote or inaccessible, six days a week.

Whether that is restricted to cutting it down to five, four or three days a week as in other countries or whether the single national price goes… either way, this is the slow destruction of the public service. This has nothing to do with ‘modernisation’ or benefits to service users, but everything to do with making money for fat cats.

Mis-sold shares

This is not how the Tories and Lib Dems sold privatisation to the public. They spun the 2013 sell-off as the only means to raise investment funds and a throwback to Thatcher’s ‘popular capitalism’, with shares for Joe Public as a side-earner for retirement.

In reality as many exposés and even the official parliamentary report showed, it was sold off at £2 billion below its actual value, rising 38% in value in the first day and ensuring the hedge funds and bankers could cash in their easy profits.

Management then closed scores of offices and mail centres to sell off the land for hundreds of millions of pounds, part of which they used to invest in operations in countries across Europe and the Americas. Meanwhile they have hiked stamp prices again and again for the public.

None of the money from privatisation was put towards investment in better services or digitalisation – which the CWU supported by the way. If on the other hand Royal Mail had not been privatised, the billions of profits made since 2013 would have gone into investment. For example it could have a green electric fleet by now, rather than the token handful of vans it has used to greenwash its image.

The last big juicy area of profit lies in reaping the millions locked up in postal workers’ terms and conditions. Imposing later starts, flexi-working, annualised hours, cuts to supplementary payments, compulsory Sundays – and that is just their opening gambit – will ruin the family friendly aspects of the job and adversely affect their health, even shortening their working life.

The 2% pay rise offered at a time of nearly 10% inflation – an 8% pay cut – with an extra 3.5% if posties sign up for all these cuts, making the job they signed up for unrecognisable, is a sign of how arrogant postal bosses have become. They are relying on the mainstream media not to report on the huge, six-figure bonuses they have given themselves… for missing the targets they set themselves!

This is sheer greed, nothing more. Postal workers are right to be angry, as their massive yes vote shows.

Renationalise Royal Mail

Keith Williams argues that Royal Mail is losing money, a £1million a day. He is offering to open the books to the CWU officials to examine.

As the saying goes, there are lies, damned lies and statistics, easily manipulated by accountants. That said there is an element of truth, given that the volume of parcels and letters drops in summer. But they have not dropped so much!

Meanwhile Royal Mail has dragged its feet hiring staff to fill vacancies, meaning it has to pay out for agency workers. That’s why costs have risen while parcel numbers have declined. Once mail volumes start rising again that will reverse, up to the usual Christmas bonanza.

So even if this is true, it is a temporary phenomenon: a bit like declaring global warming is over because there is snow on the ground.

In fact Royal Mail pulled the exact same trick in summer 2020 – just before two years of record profits! Despite the bleating of shareholders and anti-union tirades in the Tory press, Royal Mail has made a respectable profit every year for the past two decades.

The CWU will no doubt reject this trick. Postal workers should have the backing of the entire trade union movement and the public, raising alarm at the threat to the daily delivery guarantee and making the case for the renationalisation of Royal Mail without a penny in compensation to bloodsuckers like Daniel Kretinsky and his crew.

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