Royal Mail staff set to strike after ministers unveil plans for £3bn sell-off
Postal chaos fears as privatisation ‘not even Thatcher dared do’ gets green light.
Royal Mail staff are set to disrupt postal services in a rolling programme of strikes after ministers unveiled plans for a £3bn privatisation of thepostal service within six weeks.
As the government embarked on a state sell-off, confirming the sale of at least half of Britain’s 497-year-old postal service, the Communications Workers Union warned it was planning a series of strikes that could paralyse deliveries nationwide.
Billy Hayes, deputy general secretary of the Communication Workers Union (CWU), said Royal Mail’s 150,000 workers would not stand by and watch “people in the City and the board make a killing” from a privatisation that threatens frontline workers’ pay and conditions. He added: “This isn’t about what’s best for the Royal Mail, it’s about vested interests of government ministers’ mates in the City.” Hayes also warned that strike action “now looks more likely than ever”.
Bankers, lawyers, accountants and PR firms are set to collect up to £20m in fees from advising on the sale.
Hayes said 96% of Royal Mail staff opposed the sell-off, which “not even Thatcher dared do”, even though 10% of the shares, worth up to £2,000 each, have been set aside as free awards for Royal Mail workers in one of the biggest employee share schemes. Staff would also share a further £13.3m – about £90 each – in dividend payments in the first year, and more in following years.
Margaret Thatcher, who privatised British Gas, British Airways, British Telecom and dozens of other state-owned institutions in the 1980s, refused to countenance a sale of Royal Mail, saying she was “not prepared to have the Queen’s head privatised”. Lord Heseltine and Lord Mandelson both subsequently tried but failed to sell the company, in the face of intense opposition from MPs. The sale was approved by parliament in the 2011 Postal Services Act.
Postal staff booed and jeered Royal Mail’s chief executive, Moya Greene, as she pleaded with them to pull back from the first nationwide strike since 2009. They will be balloted for strike action within the next couple of weeks, and a series of rolling strikes could begin before the end of October.
A union source said strikes would be planned to cause maximum disruption, with drivers, sorting office workers and delivery staff taking action on consecutive days causing a week of nationwide chaos. The source said strikes – which would be officially over pay and conditions as they cannot legally strike over privatisation – were all but certain, and pointed out that previous strike ballots were backed by more than 90% of members.
Michael Fallon, the business minister in charge of the sale, warned the union that strike action would not derail the sale. He said Royal Mail must be sold so that it can borrow private money and not compete against schools and hospitals for public funds. Fallon attacked the union for pressing ahead with plans for strike action when staff have been offered a 8.6% pay rise over three years. “Teachers and nurses are only getting 1%,” he said.
The union dismissed the pay offer as “misleading and unacceptable” sweetener designed to win over support for the privatisation.
Greene told union representatives at a heated meeting in Birmingham that a strike “makes no sense” and could mean the Royal Mail loses business: “It is because our customers trust us and value the service we provide, that there should not be a strike at this crucial time. If businesses can’t rely on us, they will look elsewhere to protect their own business.”
The company warned potential investors that it expects the union to take industrial action next month but said it has “contingency plans in place and will also consider its legal options”. In its official “intention to float” document filed with the London Stock Exchange the government revealed that it intends to float at least half of the company – a much bigger stake than anticipated, which means the state would lose control of the service.
It means Royal Mail could fall into foreign hands because the government is now prevented, by the European Union, from holding a “golden share” preventing an overseas takeover.
The exact size of the flotation will depend on investor appetite, but at least 41% will be sold on top of the 10% handed to postal workers.
The public will be able to buy shares via stockbrokers or directly from the government via postal or online applications. Members of the public will have to buy at least £750 worth of stock, while Royal Mail employees will have preferential access to more shares if they spend at least £500.
Fallon said he hoped millions of people would buy into Royal Mail, and said the government will launch a low-key version of the “Tell Sid” promotion for the 1986 privatisation of British Gas.
Chuka Umunna, the shadow business secretary, attacked the government for “pushing ahead with this politically motivated fire sale of Royal Mail to fill the hole left by George Osborne’s failed plan”.
Mario Dunn, campaign director of Save Our Royal Mail, said: “This might be good news for the bankers but it is bad news for Royal Mail customers. The elderly, people in rural areas and small businesses will be particularly hard hit by the inevitable price rises and service reductions that will follow this privatisation.
“Royal Mail is a successful public sector enterprise. This is an unnecessary and ultimately political privatisation.”
Fallon promised that sale will not affect Royal Mail’s universal service obligation to deliver to 29m addresses, Monday to Saturday for the same price.
However, the union warns that private owners will campaign to end the expensive obligation.
The Institute of Directors said the government was “absolutely right” to privatise. Simon Walker, the IoD’s director general, said: “Royal Mail employees should see this as a great opportunity, not only to own a stake in their company, but also to give it the best chance to succeed in a competitive delivery market.
“The unions must acknowledge that strike action is not in the best interests of the business or their members.”
Trade Union Opposes Attempt at Covert Privatization of Bulgarian Postal Operator
The Confederation of Independent Trade Unions in Bulgaria (CITUB) has threatened to stage a nationwide protest in front of the Council of Ministers building unless a stabilization plan for the state-owned postal operator Bulgarian Posts EAD is prepared and approved next week and the salaries of the operations personnel are increased by 10%.
Plamen Dimitrov, CITUB President, expressed worries about the current condition and future of Bulgarian Posts EAD at a Wednesday press conference.
“We were given assurances about the financing of Bulgarian Posts, scant as it may be, but the plans to seek a strategic investor are unacceptable and inadmissible,” Dimitrov stated, as cited by the Bulgarian Telegraph Agency (BTA), commenting on a September 3 meeting with Transport Minister Danail Papazov.
Papazov announced on September 3 that a strategic partner would be found for Bulgarian Posts EAD by the end of the month which would acquire 49% of the company.
He claimed that Bulgarian Posts EAD needed efficient and professional management, adding that, if necessary, foreign managers could be attracted into the company, but no change of ownership was to be allowed.
Dimitrov said that funding to the tune of BGN 12.5 M a year, combined with good management policies and dialogue with the trade unions would help the postal operator get on its feet.
He insisted that the Transport Minister had to give up plans to seek a strategic partner of the postal operator, Prime Minister Plamen Oresharski had to find a formula for securing initial financing of the company to the tune of at least BGN 5-7 M, and socialist leader Sergei Stanishev had to vow to not allow the privatization of Bulgarian Posts EAD.
The CITUB Chair made clear that a failure to satisfy the demands would result in a nationwide protest of some 1200-1500 employees of Bulgarian Posts EAD on September 25 in Sofia.
According to reports of Sega daily, in the first half of 2013, Bulgarian Posts EAD increased losses to BGN 6.3 M from the level of BGN 5.7 M in the first half of 2012.
Sales of the company fell by 3% to BGN 63 M.
The average gross wage at Bulgarian Posts EAD is BGN 503 and around 1/3 of the total headcount of 12 000 have switched to a reduced work schedule.