I want to thank you for the privilege of addressing your conference.
These past few years we have watched with great concern the struggle of the people in Greece to deal with austerity.
Many people in the labour movement in Britain have been inspired by your defence of your basic rights and living standards.
I bring you best wishes from the CWU in this continuing fight.
The CWU in Britain has been campaigning against privatisation since the early 1990’s.
During this period, the CWU’s campaign has resulted in the defeat of 2 Parliamentary Bills in 1994 and 2009; the defeat of a management lobby for privatisation from 2004 – 2007; and the failure of other less public attempts to privatise the industry.
Last year, the Conservative-led Coalition Government succeeded in selling 60 percent of Royal Mail on the London Stock Exchange.
Obviously this was a great disappointment.
The union had been on campaign alert when the Coalition was elected in 2010.
Following a Government announcement, we commenced our campaign from 2011, which ran the Government very close.
The Government majority in Parliament proved too strong for the union to defeat the 2011 Act authorising a sale – they had a majority of 85 at the time.
But the strength of our campaign threatened to wreck the sale.
In 2013, we were utilising three main tactics:
- continuing to engage with the government,
- organising a political campaign against any sale
- negotiating with the employer to secure protection for postal workers in the event of a sale.
We were meeting with government ministers regularly. There were few concessions, but it did allow us to understand the issues better. This in turn allowed us to sharpen up our anti-privatisation work.
Our political campaign involved some distinct tactics.
We became part of an alliance of organisations in the “Save Our Royal Mail” campaign.
They could present the arguments free from the accusation that the union faced of being a “vested interest”.
At the same time the union took its independent political initiatives. This was particularly true inside the Labour Party.
As the official Opposition to the Coalition Government, Labour could raise matters before a wide audience and really press the government.
So we discussed many tactics and policies which wouldn’t stop privatisation, but could secure the industry, and our members, in the event of privatisation.
This approach came to a head when we put forward a motion to Labour’s Annual Conference that an incoming Labour Government should renationalise Royal Mail in the event of a sale being carried through.
This was carried unanimously by delegates.
This position wasn’t supported by the Labour leadership, which didn’t come as a surprise to us.
At the same time, we were trying to negotiate a new pay and staffing agreement.
In order to carry this through, we had to organise a strike ballot. After an intense campaign, the membership voted for strike action with a 78% majority on a 64% turnout.
With this result management began to negotiate very seriously. The result also seriously rattled the Government. They could see a dangerous combination of our political initiatives alongside a campaign of strike action.
The Government therefore took the gamble, rather than risk them missing the tight timescale it had to set for privatisation.
On 11th October 2013, the shares were sold below their value.
The sale achieved £1.98 billion. The market immediately understood the shares were cheap and valued them at over £3 billion.
The scandal around this has continued for some time.
Earlier this year, the National Audit Office revealed that the Government sales strategy had failed in a number of ways.
- the shares were sold nearly half their real value
- investors that the Government had given priority to as long-term investors sold off shares within weeks at a huge profit
- financial advisers to the Government did not defend the interests of the general taxpayers in the country.
So, even though successfully selling the company, the Government still paid a price for their unpopular policy.
We had hoped that a combination of political campaigns and a strike would defeat the sale. But this could not overcome the market’s rush for cheap assets. The sale was oversubscribed 25 times.
Once the sale went through, Management were keen to settle down industrial relations.
Consequently, they made major concessions and came to an agreement with the union.
The agreement was very innovative – giving the workforce legal guarantees on its existing terms. The agreement includes:
- a 9.8% increase in pay over a three-year period
- guarantees against outsourcing, selling or transferring any part of the business
- no franchising out any part of the business
- no introduction of self-employment
- no two-tier workforce – new employees take up same conditions as established staff
- existing staffing agreements maintained – only to be amended by agreement
- no compulsory redundancies
- employment model to remain primarily full-time
- no zero hour contracts and…
- a variety of guarantees on other benefits, including pensions, expanding the industry and the governance of the industry.
The legal protections are extended to the time of the first review in January 2019.
This agreement was carried by a 94 percent “yes” vote one in the members’ ballot. This was an extraordinary result for a complex major agreement and shows how strong it is.
Overall, our assessment is that the agreement does not solve all our problems – but it gives us an excellent platform from which we can defend the workforce in a privatised company.
Before finishing, I want to make some remarks about our defensive tactics in the run up to privatisation.
Privatisation separated the Royal Mail from the Post Office Counters, which remains a publicly owned company.
Post Office Counters is simply the local post offices, and their administrative centre.
It is loss-making service and receives a government subsidy to maintain the network of 11,500 branches.
In the run-up to privatisation, we campaigned hard to get a long-term commitment for Royal Mail to use Post Office Counters for its services.
Our concern was that a privatised Royal Mail would prefer to use commercial retail chains, rather than the publicly owned post offices.
Through a great deal of political campaigning, we got a 10 year contract to guarantee Royal Mail use of Post Office Counters. This runs until 2022. We will be looking to extend this when, as is likely, Labour is returned to government in 2015.
We also fought hard to ensure that the existing provisions of the universal service in the UK are not subject to an easy change by government, or management.
We have a six-day delivery service and a uniform tariff – even though these are not in the EU directive.
Again through our political campaigning, we got a commitment that the universal service could only be changed by an act of Parliament. We are considering how to further strengthen this in 2015.
Such defensive tactics are not a substitute, or a diversion, in the fight against privatisation.
These, and other safeguards we secured, mean that conditions in the industry for the workforce, and services for customers remain on a high level. This is better than if we’d simply accepted the market will now dominate all the functions and outlook of the industry.
Following hard on the heels of privatisation, we are now having to address the problem of delivery competition to Royal Mail.
Since 2004, we have been addressing the issue of competition in access mail. At that time, the regulator rigged the market, which resulted in Royal Mail subsidising competitors who had access to its network.
By long-term pressure we got some relief on this, but it took around five years work.
We now face similar problems with deliveries. The regulator is refusing to act while a competitor is selecting profitable areas in cities like London, Liverpool and Manchester within which to organise a delivery service.
The competitor – TNT – delivers three days a week, pays its staff the minimum wage rate, and hires on zero hour contracts.
We are engaged in a political campaign to press the regulator for measures which ensure that Royal Mail continues to be able to fund the universal service. So we are raising questions like:
- a cap on competition
- customer protection which forces competitors to publish details of their quality of service
- a living wage in the sector for all postal workers.
Doubtless this is going to be a difficult campaign – but we will press hard because that is what our members and the public need.
Thank you for listening.