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From The Socialist newspaper, 15 September 2010

Royal Mail: Con-Demned to history?

THE ANNOUNCEMENT by business secretary Vince Cable last week that the Con-Dem coalition intends to sell off Royal Mail (RM) came as no surprise to anyone in my office.

Coventry postal worker

The exact details are still to be revealed but it's believed that a compromise between the Tories and their Liberal poodles will involve the privatisation of the majority of RM (most likely to a state-owned European postal operator, ironically) with the remainder held 'in trust' for the workers.

This portion of shares would provide dividend payments while remaining unable to be sold, at least for a few years. It is also intended to neuter the Communications Workers' Union (CWU) by discouraging workers from opposing a sell-off or from taking industrial action against attacks on pay, pensions and workloads. After all, who would want to hurt the company financially when they're a shareholder!?


The Con-Dem argument for selling RM is that the company needs 'an injection of capital' to allow further modernisation and to reduce the pension deficit of 8.4 billion (down from 10.3 billion last year). This argument falls down on both counts and is shown up to be the ideological claptrap it really is.

First, workers in RM created profits of 321 million in 2009 and 408 million in 2010 during the worst recession in living memory and in the face of (supposedly) falling mail volumes, doing more work for the same wage with less staff.

Second, the pension deficit which successive governments allowed to build up, while siphoning off profits, has reduced over the last 12 months by 1.9 billion and under a plan agreed between RM and the fund's trustees, the deficit will be eliminated over 38 years as a result of increased funding by the business.

There is a third reason now being spouted by RM's new chief executive, Moya Greene, as to why privatisation is necessary and that is the 1.2 billion loan New Labour made to the company for modernisation. Repayment began this year but I was unable to find any figures as to how much this is. Greene has stated that she is seeking to suspend the repayments, otherwise RM will become insolvent by Christmas.

Greene has been in the job since June, having previously been in charge of Canada Post, where she was extremely unpopular with the workforce. Profits increased in her time there but so did injuries at work, grievances and strikes.

The Montreal Gazette (27/5/10) was under no illusions as to why she was head-hunted by RM: "Moya Greene is going to the UK to execute something the Canadian government doesn't yet have the political appetite for here - privatising the mail service."

The issue of RM's finances in relation to the loan were commented on by John McFall, then chairman of the Treasury select committee (the Guardian 17/6/09). He questioned (former business secretary) Peter Mandelson and (former RM chief) Adam Crozier's assertion that privatisation was the only way of ensuring RM's modernisation programme was completed.

They had said that the company needed hundreds of millions but McFall argued that, as this was not billions, then the government could convert some of its loan to equity as sole shareholder, or simply reschedule the loan repayments.

Whatever happens to RM in the future will depend on what action we take now. The CWU needs to make it clear to workers and the public exactly what privatising the postal service would mean - job cuts, wage cuts, increased workload, reduced or withdrawn services and public subsidies for private companies.

As a union we need to raise the consciousness of workers and the public and link the fight to the anti-cuts campaigns and to organise and cooperate with other unions planning action, like the London FBU, RMT and PCS.

Royal Mail has existed for 350 years but if the Con-Dems get their way, it could be lost forever within 350 days.

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In The Socialist 15 September 2010:

Join the fight against cuts

Socialist Party editorial

Decisive action can defeat this government

TUC congress

TUC backs youth jobs demo

TUC told to name the day

TUC: Build for action against cuts

Socialist Party youth and students

Stop the 'slippery slope' to two-tier education

How will the Browne Review into university funding affect you?

Student strikes can win results

Feature: Socialist Party women

Women and the struggle against oppression

Socialist Party news and analysis

Royal Mail: Con-Demned to history?

Privatisation's giant wrecking ball

Fight the jobs cuts massacre

Middlesborough local union-led public services alliance set up

Fast news

General strike in France

Osborne targets the needy

Labour councillors challenged in Hastings

Shropshire: showing socialist alternative gets results

Socialist Party workplace news

London Underground: Action biting against job cuts

UCU executive pulls out of strike ballot

Fight for jobs at GSK

Workplace news in brief

Anti-cuts campaign

Mood of defiance in Huddersfield

Hull park rangers protest

How do we vote to stop the cuts?

Nottinghamshire: Campaign saves vital service

Lobbies warn councils of workers' action

Socialism 2010

Socialism 2010: How can we save the environment?

International socialist news and analysis

All-India general strike: Eyewitness report from Chennai

Fighting oppression in Kazakhstan

Socialist Party review

The Third Man


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