Opposition to Post Office and Royal Mail changes

Union members have fiercely opposed plans to privatise the UK’s Royal Mail service and close or franchise almost a quarter of the Crown branches directly managed by the state-owned Post Office. During May and June 2013, strikes called by the UK Communication Workers’ Union (CWU) closed more than 100 post offices. The CWU said the restructuring plans would affect 800 workers, and its aim was to protect jobs and services and to secure a ‘fair’ pay rise for Post Office workers.

Crown Post Office network restructuring

On 28 May 2013, postal workers belonging to the Communication Workers’ Union (CWU) took part in a fifth round of one-day strike action to protest Post Office closure and franchising plans, and related pay issues.

The CWU is opposing plans to close or franchise 76 of the UK’s network of 373 Crown Post Offices which are currently directly managed by the state-run service. The plans will affect over 800 employees and the union says its industrial action is aimed at protecting jobs and services and securing a ‘fair’ pay rise for staff.

CWU officials said support for the industrial action ‘remained solid’ during the one-day strike and more than 100 post offices were closed all day, while others were staffed by managers and casual staff and therefore only able to provide reduced services or hours. Dave Ward, Deputy General Secretary of the CWU, said:

Our members remain determined to protect Post Office jobs and services and to win a fair pay rise. The overwhelming support we’ve seen across the country for today’s fifth round of strike action is testament to the resolve of our members and the support they have received from their customers, communities and politicians.

The Post Office said in a press release that it was ‘disappointed’ that further strike action had occurred despite the continuation of talks to end the dispute and its agreement to pay GBP 100 (€117 as at 19 June 2013) of its current pay proposal immediately. The Post Office said it was:

…still in discussions with the CWU around pay options that would not increase the bottom line loss of its Crown Post Office network, and also the potential to make a consolidated pay increase before April 2015, if the Crown network can be returned to profit before then.

Support from the London Assembly

On 5 June, the London Assembly unanimously carried a motion raising concerns over Crown Post Office closures and franchising in the capital. Seventeen of the offices affected, including five of the six selected for outright closure, are in Greater London. The London Assembly stated that the proposed reforms ‘have the potential to disproportionately impact on Londoners’.

The motion called on the Mayor of London, Boris Johnson, to raise the issue with the government, to request a ‘broader social and economic assessment of the proposed closures, focusing on the impact on customers’, and to seek assurances from ministers that ‘successful franchisees for Crown Post Offices will be strongly encouraged to pay their staff the London living wage’. The CWU welcomed the London Assembly’s intervention.

According to the CWU, informal talks between the Post Office and the union in mid-June made ‘no progress’. A sixth and seventh round of strikes took place on 20 and 29 June.

Royal Mail privatisation

The CWU is also campaigning against the coalition government’s planned sale of shares in Royal Mail, which was separated from the Post Office in 2012.

On 29 April 2013, Michael Fallon, the Minister for Business and Enterprise, said that the government favoured an initial public offering of shares as the preferred method of sale but that no final decisions had been taken. The government is also considering the details of an employee share ownership scheme for Royal Mail’s employees accounting for at least 10% of shares, thought to be worth some GBP 1,500 (€1,757) per employee.

Proposals to privatise the Royal Mail were not included in the Conservative Party’s manifesto at the 2010 election but have been supported by the Liberal Democrats, their coalition partners. The subsequent coalition agreement contained a commitment to ‘seek to ensure an injection of private capital into Royal Mail, including opportunities for employee ownership’. The Postal Services Act 2011 paved the way for the forthcoming sale, and the government agreed that the state should take responsibility for Royal Mail’s GBP 12 billion (€14 billion) pension fund deficit.

In April 2013, the CWU conference re-stated the union’s opposition to the privatisation of Royal Mail, which it does not believe is in the interests of customers, the workforce or the wider economy. The CWU is engaged in talks with the government on the issue.

The union has also been active in the campaign group that recently established the ‘Save our Royal Mail’ campaign, highlighting the potential impact of a sell-off of postal services on rural areas and on small businesses, and also on people currently entitled to free postal services such as the visually impaired and the British armed forces.

On 19 June, the union announced the results of a consultative ballot of its Royal Mail members on a number of issues including the privatisation of Royal Mail. From a turnout of 74% of those eligible to vote, 96% of those voting rejected the government’s plans to privatise Royal Mail.

Commentary

Both the government and the CWU consider each other’s stance on the issue to be ‘ideological’. The government has warned that if the CWU campaign puts at risk its preferred initial public offering route, it will look at alternatives such as sovereign wealth funds or other institutional investors.

The Labour Party has accused the government of ‘desperation’ in pushing ahead with the privatisation of Royal Mail, which it has described as a ‘fire sale’. However, governments of all parties have attempted to privatise the postal service in recent decades.

Mark Hall, IRRU, Warwick Business School

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