CWU response to Labour’s Industrial Strategy Consultation

21/03/2017

CWU response to Labour’s Industrial Strategy Consultation

Introduction and Summary

 

  1. The Communication Workers Union (CWU) is the largest union in the communications sector in the UK, representing approximately 192,000 members in the postal, telecoms, financial services and related industries.

 

  1. We welcome the Labour Party’s wide ranging inquiry into industrial strategy. The issues raised in the consultation are of great importance to CWU members.

 

  1. We believe that the government’s current approach to the economy and our key industries is unfit for purpose. Typified too often by short-termism, companies routinely fail to act in the wider interests of their employees or other stakeholders. This can be seen particularly starkly in the explosion of insecure employment models we have seen in recent years. Moreover, our economy is being held back by under-investment and regional imbalances. These problems have grown as a result of economic policies and a regulatory approach that favours market liberalisation, competition, and cost cutting over service quality and long term investment – even when it comes to key infrastructure.

 

  1. In the post and telecoms sectors, we are concerned about the absence of government intervention in developing a long term strategic vision for better quality infrastructure and services. In particular, the future of the Post Office, the universal postal service and the universal rollout of high quality broadband are all under threat from a combination of government cuts, low cost competition, privatisation, regulatory pressures and inadequate investment.

 

  1. In response to these challenges, we suggest that a fundamental change in approach to industrial strategy is required. This should rest not only on a greater commitment to public ownership of, and public investment in, key infrastructure, but on sustained cooperation between government, trade unions and the private sector and institutional reform. Sustainability must become central to corporate governance and the regulatory agenda so as to meet the UK’s long term needs and avoid the kind of speculative and high-risk behaviour that has typified too many organisations in recent decades.

 

  1. Our response focuses on the consultation questions most relevant to our experience.

 

Productivity and Skills

Q1. What are the causes of Britain’s poor productivity performance and how can they be overcome?

 

  1. In the decade prior to the 2008 banking crash, UK productivity per hour rose at a steady annual rate of about 2.2%. Since then, however, productivity has lingered at roughly 0.5% per annum and in Q3 2016, stood at 0.4%. There is no single cause or solution for this situation; rather it is a multifaceted problem that has developed over a number of years.

 

  1. Of particular concern to CWU members are three interrelated factors:
  • Under investment in skills and learning;
  • Regional disparities in access to opportunities; and
  • Corporate mismanagement

 

  1. In 2014, the UK Commission for Employment and Skills reported that the UK was ranked 17th of 30 OECD countries for low skills, 18th for intermediate skills and 12th for high skills (UKCES, 2009). In 2011, of 33 OECD countries, the UK was ranked 19th for low skills, 24th for intermediate skills, and 11th for high skills. Concurrently investment in skills has been in “sustained decline” since 2003, particularly in the private sector, exacerbating the UK’s relative decline vis-à-vis its OECD competitors.

 

  1. The distribution of skills is relatively polarised, both in terms of qualifications and geographical variation. Compared to an OECD average of 44 per cent or an EU average of 48 per cent in 2011, only 37 per cent of UK adults finish education at a level equivalent to A-level. In turn, the UK’s skills supply base is more divided than many other competitor nations. Divisions are also geographic. It is notable, for example, that only two of the 15 top performing Local Enterprise Partnership (LEP) regions in terms of high level skills are located north of the Midlands, and again only two of the 15 poorest performing LEP regions are located south of the Midlands.

 

  1. Underpinning these failures is an economy that privileges short-term returns over sustained investment and long-term outcomes. Many companies are now owned by institutional investors who, in the pursuit of short-term gains, opt to spread their resources across a broad range of organisations, moving capital as market conditions change and undermining efforts to inculcate a sense of strong corporate governance. As a consequence, structural investment is limited and the development of a cooperative industrial strategy hindered.

 

  1. Moreover, shareholders are currently the only group with significant rights in relation to how companies are run: they alone have the right to elect company directors (annually in FTSE 350 firms); have an advisory vote on remuneration boards; and they have the ability to direct corporate policy through AGM votes. Though the responsibility for safeguarding a company and its viability falls on directors, shareholders are able to shape the corporate culture and agenda within which they operate.

 

  1. Overcoming the challenges outlined above necessitates a new approach to economic and corporate management. While there is a clear need for companies to invest in skills and training, repairing regional disparities can only be achieved through government intervention.

 

Q2. Is this weakness a reflection of the changing sectoral composition of the UK economy or a problem across all sectors?

 

  1. The challenges described above are experienced by CWU members regardless of which sector they are employed in. The experience of members in Royal Mail, for example, is one of a relentless pursuit of cost efficiencies as a result of market liberalisation, competition and privatisation. This poses a threat not only to jobs and labour standards in the company, but also the financial sustainability of the universal postal service.

 

  1. The recent sale of Royal Mail has placed a natural postal monopoly completely in private hands, something that has happened in only a handful of other countries. Most national governments have retained at least a majority stake in their incumbent postal operator, maintaining control over an important public service, and helping to ensure it can deliver effectively on behalf of all users.  Even the United States, one of the World’s most liberal economies, has a wholly publicly owned postal service with a monopoly on the delivery of residential letters to ensure it can continue to fund its universal service obligation.  In contrast,  Royal Mail has paid out upwards of £564 million worth of dividends to shareholders since its privatisation: this is capital that could be used to reinvest in the network and enhance training, operations and quality of service, yet it has been siphoned away from the business.  It is no coincidence that despite having the best funded pension scheme amongst the FTSE 100, Royal Mail is now threatening to close the scheme to future accrual in an effort to cut costs.

 

  1. The challenge faced by Royal Mail since privatisation has been exacerbated by poor regulation on the part of Ofcom and, previously, Postcomm. The regulator has consistently pursued an approach that favours competition over investment, in an effort to increase choice and reduce prices for customers.  This puts pressure on Royal Mail’s revenues and undermines the financial sustainability of the universal postal service, which the regulator has a primary duty to protect.

 

  1. Moreover, the regulator has created postal competition artificially, by forcing Royal Mail to open up parts of its network to competitors. This has led to a situation where Royal Mail faces by far the highest level of access competition in Europe, with 56% of all letter volumes carried by other operators.  These access operators collect mail in profitable, easy to serve areas and channel it to Royal Mail to deliver the final mile to customers.  Rather than bringing benefits for ordinary postal users, the main winners from access competition have been large bulk mailers, including wealthy banks and energy companies.  They have enjoyed considerably lower costs whilst prices have risen for residential and small business customers.

 

  1. The unregulated parcels sector represents another significant and growing form of postal competition. Unlike Royal Mail, operators in this market are not subject to regulation or even minimum standards of service or consumer protection.  Consequently they are able to operate using very low cost employment models, which we believe exploits workers.  There is a growing body of evidence to suggest that parcel delivery firms such as Hermes and Yodel are using falsely self-employed workers to circumvent statutory employment obligations including payment of the statutory minimum wage, National Insurance and pensions contributions.

 

  1. This situation has a number of harmful effects, including the undermining of labour standards in the postal sector, reduced revenues to fund the universal postal service, lost income for the Treasury and poor service quality for parcel customers. The CWU has called on Ofcom to introduce minimum quality standards in the growing parcels market in order to bring desperately needed improvements for customers and to help raise employment standards.  However, as yet there is no sign the regulator is willing to do so.  Not only is this contributing to the rise of a low wage economy, it is also holding back the growth of e-commerce.  A significant share of consumers have had negative experiences here and this is holding the industry back – 40% of customers say that concerns over delivery are a barrier to them shopping more online.[1]

 

  1. Ofcom argues that Royal Mail must become more cost efficient in the way it delivers the universal service, which has resulted in job cuts and continues to threaten employment and labour standards in the business. Despite denying that it has any remit for employment standards, we are seeing Ofcom focusing on these in setting its regulatory agenda, for instance in criticising CWU agreements with Royal Mail and in the way it imposes efficiency targets. It has also indicated it believes that Royal Mail would benefit from a more flexible workforce, suggesting that Ofcom is looking at exploitative low cost parcel operators as a benchmark for Royal Mail.  Unfortunately, Ofcom has failed to recognise the harmful impact that job losses and declining  labour standards will have on the business and its ability to deliver a high quality universal postal service in the future.

 

  1. This drive for cost efficiencies is mirrored to an extent by members in BT and the telecoms sector more generally, where fierce competition and regulatory priorities have driven continual price and cost reductions. The size of BT’s network offers the opportunity to take advantage of economies of scale and invest in new technology and working practices to enhance efficiency and thus productivity. Whilst BT has invested heavily in the UK’s network infrastructure in recent years, there is no doubt that it could do more and that much more funding is needed to ensure that all homes and businesses across the country benefit from a decent broadband connection.  However, achieving this goal will rely on a different kind of regulatory framework which promotes long-term risk investment over cost cutting and short term profitability.

 

  1. The announcement by Ofcom in March 2017 to legally separate Openreach from BT Group, was in part designed to give Openreach greater freedom to invest in the network. There are however complexities  and potential costs involved in becoming a legally separate company, which could impact on Openreach Ltd being able to make the business case for investment in the network into the future.

 

  1. We are apprehensive that the regulator has forced BT to TUPE 32,000 workers. We have argued that a TUPE transfer was deeply concerning due to its complexity and the time that would need to be invested by the business and the union to get right. Although we are pleased that the final agreement does provide some assurances on the future of the BT pension scheme, including legislation on the Crown Guarantee, we still await the BT Pension Scheme Trustees consent to Openreach Ltd becoming a participating employer in the pension scheme.  There are also still worrying issues for our members.    TUPE legislation changes which came into effect in 2006 watered down the protections for workers.  We therefore will be seeking a binding agreement with Openreach Ltd to protect its employees’ pensions, pay, terms and conditions, as well as all collective agreements into the future.

 

  1. BT has made clear that it is willing to contribute to the provision of a Universal Service Obligation (USO) for 10Mbit/s broadband if the regulatory and policy environment supports its investment case. Ofcom’s reform of Openreach could compromise this commitment because it would undermine the scale and structure that allows BT to pursue a long term, high risk investment strategy.  We also would like to see a commitment from the Government to ensure that the speed of the USO meets future demands.

 

  1. No fixed network operator other than BT has demonstrated any intention to invest in communications networks in areas of the country where the economic case is weak, or to offer their services for universal coverage of 10Mbit/s by 2020. Neither have they been willing to make any solid commitment to invest in an independent Openreach.

 

  1. The CWU has argued consistently for a bold, alternative strategy to enhance Britain’s digital infrastructure and to ensure that no one is left the wrong side of a digital divide. A lack of ambition and commitment from successive governments, combined with inadequate regulatory incentives for private investment, means the UK still has a long way to go to achieve this goal.  There are still 1.3 million households unable to receive a decent broadband speed of 10Mbit/s, which is seen as the minimum needed for effective internet use.  There are also around 7 million adults still offline and over 9 million adults who lack basic online skills[2].   The CWU has called on the government to invest more in digital infrastructure for the long term, and to set out a clear plan for addressing the UK’s online skills deficit.  This should include a genuine commitment to investing in the training needed to get everyone online.

 

  1. Borrowing to invest in communications infrastructure makes economic sense, because it will create jobs, drive growth and improve access to education and other services. One widely quoted source estimates that enabling everyone in the UK to go online would add another £63 billion to the economy.[3]

 

Q5. Is the extensive use of precarious employment such as zero hours, agency work and short term contracts having an effect on poor productivity?

 

  1. The number of people employed on a zero hours contract in their main job has risen from 143,000 in 2008 to around 903,000 today, and there are now 865,000 agency workers, up by 30% since 2011. These various forms of casual employment are generally associated with low pay and a lack of basic employment rights, such as paid holiday, sick leave and access to a workplace pension. They are also being used as a means to avoid employment related taxes, which presents a considerable and growing problem of lost revenue for the Exchequer.  Despite the increase in workers being treated as self-employed, many display all the characteristics of direct employees and should be treated as such.  Citizens Advice reported last year that as many as 460,000 people could be in false self-employment.

 

  1. Such high levels of precarious employment undoubtedly have an adverse effect on economic output. With a high churn of staff in a relatively low-skilled position, incentives to invest in training and upskilling are greatly reduced.

 

Q6. How can we improve skills and training provision across school, university, on-the-job training, adult education, and re-skilling? What should be the relative balance between these institutions in skills and training provision?

 

  1. As discussed above, enhanced funding from the public and private sectors is vital in improving skills and training, particularly for those already in work. However, how these programmes are developed is no less important. We believe that training and skilling should be designed in cooperation with employees and trade unions, ensuring that it is as relevant and accessible as possible.

 

Q7. What should be the relative balance between state and employer-provided training?

 

  1. This is an issue that should be determined on a sector-by-sector basis within the context of clearly defined goals for what training seeks to achieve set in conjunction with employees and trade unions. In addition, it is vital that incremental forward planning takes place to ensure that training remains relevant and in keeping with the changing nature of the global economy.

 

Q8. How can we improve the quality and quantity of apprenticeships?

 

  1. We are concerned that too few apprentices are receiving the kind of high-quality in work training that are needed by individuals and the economy at large. Indeed, there is evidence to suggest that ineffective schemes have been used by employers as a means of circumventing their obligations, for example, to provide employees with the National Minimum Wage. Where examples of best practice can be identified they should be learned from and rolled out as widely as possible. Similarly, to best ascertain the needs of apprentices it is vital to involve them and more experienced employees in the design of apprenticeship programmes. Trade unions have a key role to play in this.

 

Q10. How can we improve careers advice in schools and colleges i.e. the re-introduction of professional guidance as part of the curriculum?

 

  1. Careers advice in schools and colleges is an essential path to a suitable and rewarding vocation, but evidence suggests that careers advice for young people is not currently as effective as it should be. “Going in the Right Direction”, an Ofsted report of September 2013, conducted a visit of 60 secondary schools and academics between December 2012 and March 2013 and found that three quarters of schools visited did not provide impartial careers advice.

 

  1. The CWU believes the Government should address this issue through greater action and funding to improve the quality and quantity of careers advice in schools. This should include a focus on tackling gender stereotypes and giving girls the inspiration and the confidence to pursue a career in traditionally male dominated sectors.  The Government should also explore ways to involve industry stakeholders including employers and trade unions in careers education and advice.

 

Q11. How can we ensure lifelong access to training opportunities, suitable to a world in which people may change career once or more in their lifetimes?

 

  1. It is undeniable that night schools of the past provided a vital source of inspiration and education to successive generations: one that is currently too seldom available. For example, as a result of the government’s 2013/14 cuts to adult education, an additional half a million people were unable to access these services. Not only should cuts be reversed, but a new joined-up approach between councils, colleges, universities and employers is required to identify where there are skills gaps and develop accessible programmes to help fill them.

 

Q12. What will be the future role of the Sector Skills Councils in developing apprenticeships and training for the future?

 

  1. The CWU advocates that all bodies connected to skills, training and employment include trade union representatives to ensure that workers’ voices are heard.

 

Q13. How should training be funded across employers, state, and employee loans?

 

  1. Passing the burden of cost to individuals is seldom the answer, particularly when many of those most in need of training and retraining are in low-paid and/or insecure employment. With this in mind, we would welcome a mix of the first two options with the exact division to be determined after future consultation.

 

Job Creation and Quality

Q14. What goals should we set ourselves in terms of job creation, e.g. with respect to job quality and full employment?

 

  1. We believe that while full employment should be the goal of every Labour government, the type of work people do and how they do it is no less important. Too many workers find themselves in precarious employment underlined by low wages and irregular hours. Mechanisms for an employee voice in the workplace are too few and dignity at work is often lacking.

 

  1. As such, Labour’s goal should be to create jobs that offer workers not only a salary that is enough to live comfortably on – a real living wage as calculated by the Living Wage Foundation – but also a stake in their workplace. This can most effectively be delivered through enhanced trade union and collective bargaining rights.

 

  1. According to The Equality Trust, The UK has a “very high level of income inequality compared to other developed countries.” It is notable, for example, that in 2015, the UK was the only G7 country that saw its wealth inequality increase. Currently households in the bottom 10% of the population have on average a net income of £9,277 while the top 10% have net incomes over nine times that (£83,897). Such figures demonstrate the need not only for a more active and progressive tax system, but also higher wages at the bottom of our economy.

 

  1. The Communication Workers Union has been at the forefront of the argument that a “new deal for workers” is required for Britain with an emphasis on fairness delivered through stronger employment rights; trade union rights and collective bargaining (including the repeal of the Trade Union Act); new forms of ownership and governance; and a Ministry of Labour.[4] This agenda was set out in Composite Motion 4 on Employment Rights, moved by the CWU and seconded by UCATT, which was passed unanimously at Labour Conference in 2015. A copy of this motion is included in Annex 1 below.

 

Q15. How can we both make poor quality service sector jobs “better” (i.e. better paid, more secure) and create more “good” (i.e. high skilled) jobs?

 

  1. We believe that the emerging gulf between the highest and lowest paid has undermined social solidarity and effectively created a two-tier economy. Reversing this will be a long process, but through enhanced trade union and collective bargaining powers it is possible.

 

  1. As touched upon above, there is a growing demand for workers to have a greater voice in how their organisations are managed. Trade unions are the single most important vehicle in achieving this. We believe that legislative changes are needed to enhance trade union’s ability to organise and to strengthen their collective bargaining rights.

 

  1. Finally, low skilled employment can be overcome, but only through targeted, long-term investment and opportunities for retraining and upskilling. We believe that workers are best placed to understand the challenges they face and should therefore be included in the design and execution of training programmes.

 

Q16. What particular challenges do gender, race, religion, age, disability, sexual orientation and other forms of discrimination pose and how might we address them?

 

  1. The issues raised above can have a dramatic effect on everything from a worker’s opportunities for promotion to their relationship with their manager. Put simply, discrimination based on gender, race, religion, age, disability, sexual orientation etc. remains all too common and requires substantive action.

 

  1. The CWU recommends that the Equality and Human Rights Commission (EHRC) be given the appropriate enforcement powers so that the regulations apply equally effectively across the public, private and voluntary sectors. It must also have adequate funding and resources to carry out its duty to enforce the regulations. It should be noted that the EHRC has faced substantial budget cuts since 2010, restricting its ability to use its existing enforcement powers in relation to the publishing of public sector equality information.

 

  1. Furthermore, we believe that employment tribunal fees need to be repealed as a matter of urgency. The cost of employment tribunal fees, introduced by the Government in 2013, discourages and generally prohibits low paid employees from making equal pay claims.

 

Q17. What steps can we take to prevent women and minority groups being paid less or passed over for promotion?

 

  1. As touched upon in the previous response, greater transparency is a vital tool in overcoming discrimination. Publicly available data as to the number of women and minority groups employed at senior levels alongside their commensurate pay levels would be one potential solution.

 

Q18. How can we better-prevent women being penalised at work for wanting to have children?

 

  1. Recent decades have seen great strides forward for women at work, not least in securing stronger maternity rights. However, too many women are still penalised for having children. According to the Institute for Fiscal Studies, in the 12 years after a woman returns to work after having a baby, the gender pay gap increases until they are 33% behind their male colleagues, on average. Given such figures, it is vital that firms are more transparent in revealing the respective wages of their male and female employees.

 

  1. The CWU also believes we need to see improvements to parental leave rightsIn April 2015 changes to shared parental leave were introduced, however, Trade Union Congress research has shown that 40% of new fathers will not qualify for these. The TUC also found that two-fifths of working fathers with a child under one will be ineligible, mainly because their partner would not be in paid employment and therefore the new scheme will have a very limited impact. In comparison, in countries including Denmark, Norway and Portugal, fathers are eligible for leave worth 100% of their normal earnings. Substantive action is needed to bridge the gap between maternity and paternity terms and to ensure that more fathers are involved with their children from birth.

 

Q19. How can we support disabled people who can and want to work do so?

 

  1. The CWU welcomed the government’s objectives of halving the disability employment gap by 2020. However, this laudable ambition has been undermined by inactivity and a failure to understand the needs of disabled job seekers. More needs to be done to ensure that disability organisations are engaged in developing employment programmes. Similarly, employers and trade unions should be approached to help cooperatively design employment schemes that make best use of disabled people’s talents and skills. Finally, greater access to training and advice is needed to ensure that recruitment processes are disability accessible and that management/staff are able to understand and support their disabled colleagues.

 

Q21. How should we respond to growing self-employment?

 

  1. According to the Labour Research Department, the genuinely self-employed “will be in business on their own account, offering services to their own clients and customers. Whether or not someone is genuinely self-employed depends on all the surrounding circumstances… HMRC emphasises that employment status is not a matter of choice. It is a matter of law.” A similar definition is offered by McKinsey & Company, who stress that self-employment, or independent work is predicated on three factors:
    1. A high degree of autonomy
    2. Payment by task
    3. Short-term relationships between worker and customer

 

  1. Inherent within the status of self-employment are diminished rights at work. For example, the self-employed are not entitled to the national minimum wage, sick or holiday pay, or automatic enrolment for tax, National Insurance or pensions.

 

  1. Since the turn of the century the number of self-employed workers has, according to the Resolution Foundation, grown by 45% to almost 5 million. We are extremely concerned about this trend. The Financial Times reports that 45% of self-employed workers currently earn less than the National Living Wage. Additionally, more systemic challenges are posed by false – or bogus – self-employment. False self-employment refers to a situation in which a self-employed worker is unable to exercise autonomy over their affairs and are, as a consequence, denied their statutory employment rights. They may, for example, be contracted to a platform provider or payroll provider, but carry out work for a third party.

 

  1. There is evidence the false self-employment poses a significant problem to the UK, one which has grown more pronounced since the 2008 recession. In 2015 Citizens Advice reported that as many as 460,000 people could be in false self-employment. Particularly affected is the construction sector, with UCATT suggesting that more than half of the people working in this sector are falsely self-employed.

 

  1. The CWU represents a number of workers who we believe are wrongly classified as self-employed, particularly in the unregulated parcels and deliveries sector. Drivers for DPD, for example, have reported that: they may be “stood down” from future shifts should they refuse to take on a delivery; though they are compensated for fuel they must pay VAT costs; and drivers are charged every four weeks to lease their vehicles. Importantly, many drivers report that they are paid less than the national minimum wage and that stringent limits are placed on the delivery routes taken by drivers – illustrating that they are very much self-employed in name only.

 

  1. This is a problem right across the unregulated parcel delivery sector, including in companies such as Hermes, Yodel and Amazon. The government has recently instructed the HMRC to investigate the employment status and treatment of workers at Hermes following an investigation by the Guardian and a subsequent report by Frank Field MP that revealed seriously exploitative employment practices in the company.

 

  1. We believe that similar assessments should be made across the gig economy to ensure that minimum standards are maintained and a floor against exploitation created. Where employers and intermediaries deliberately push workers towards false self-employment we believe that HMRC should be able to take strong action to reflect the reality of the relationship between worker and employee.

 

  1. We also believe that all workers should qualify for the same statutory employment protections and that trade unions have a vital role to play in guaranteeing workplace protections. Legislative changes are required to enable unions to more actively organise, particularly in those workplaces where the risk of exploitation is greatest, and enhance collective bargaining protections for potentially vulnerable agency workers.

 

Q23. How do we strengthen workers’ rights, including the right to collective bargaining and trade union representation, and ensure that they are effective?

 

  1. There are five steps that should be taken with immediate effect to promote collective bargaining and trade union representation. These are as follows:
    • Repeal the Trade Union Bill/Act
    • Repeal the relevant parts of the Enterprise & Regulatory Reform Act and associated measures, moving to a system of Day 1 rights;
    • Support collective bargaining;
    • Promote trade union rights to organise; and
    • End the ability of companies to hire “union busters” to oppose recruitment campaigns, or to engineer the end of recognition agreements.

 

  1. More substantively, efforts need to be made to understand how to further the role of trade unions in an era where self-employment, smaller workplaces and multi-job careers are becoming increasingly common.

 

Regional balance and inclusion

Q34. How are Britain’s strengths, weakness, challenges and opportunities distributed regionally?

 

  1. There is a strong and growing body of evidence to demonstrate that wealth and opportunity are poorly distributed across the UK. Research conducted by the London School of Economics points towards better long-term structural improvement for London and the South East in terms of economic growth compared to the UK as a whole. Price Waterhouse Coopers, meanwhile, has drawn similar conclusions, predicting that while Central London will experience 25% employment growth to 2024, no other UK region will achieve growth of more than 15%. Such figures illustrate the scale of the challenge facing Britain and the need for a new industrial strategy to overcome them.

 

Q35. What measures need to be taken to ensure that future growth is regionally balanced and inclusive?

 

  1. As with the UK skills and training deficit, rebalancing the British economy requires sustained structural investment from government in consultation with trade unions and private sector partners.

 

  1. As a nation we should also seek to harness those resources we already possess and study how we may best capitalise on them. The Post Office network is one example of a resource that has been squandered in recent years, and the CWU’s concerns on this issue were set out in a motion to Labour Party Conference last year. This contributed to the composite motion on industrial strategy which called for a plan to establish a Post Bank and use the Post Office as a key partner for a National Investment and Regional Development banks.[5]

 

  1. The Post Office is pursuing an ongoing cost cutting programme and has seen over 2,000 jobs lost in the past year. At the heart of this has been a closure and franchise programme, with 100 of its flagship Crown offices having been announced for closure and franchise since January 2015 – just under seventy of these are still outstanding. This follows on from the closure and franchise of seventy branches in 2008 and fifty in 2014-15. These changes have resulted in poorer service for customers, longer queue times, worse disabled access and the loss of a community asset. We believe that a strategy to secure the Post Office’s future is required and we reject the managed decline of a high street institution. The CWU has long argued for a Post Office Bank which would bring responsible and locally accessible banking services to communities and businesses across the UK.  The experience of other countries shows that capitalising a Post Office Bank could generate strong returns for the Post Office and the Exchequer.

 

  1. We do not believe the Post Office’s current provision here is a model for growth. Together with allowing customers to access their current account from a high-street bank, it offers its own ‘Post Office’ financial services in partnership with the Bank of Ireland (which in essence is the Bank of Ireland providing products under the Post Office’s branding). However, six years after we were told these would be expanding, the Post Office is still only trialling a current account (four years after it was launched), offers no children’s account (which was supposed to be rolled out in 2011) and no business account of its own.

 

  1. Alongside the Post Office’s need to focus on growth, we also believe a Post Bank would provide an important service for businesses and individuals as banks continue to close branches across the country. Major banks have closed 1,700 branches across the UK in the last five years alone, negatively affecting small businesses and the elderly in particular. Around 1,500 communities have reportedly been left without a bank on their high street at all and the Federation of Small Businesses estimates that the number of bank branches now stands at around 8,000, down from 17,800 in 1989. For customers, a Post Bank could help to address financial exclusion which is a serious problem in the UK, with estimates that 1.5 million people do not have access to a bank account. With a presence in communities across the country, it could offer affordable, responsible deals on personal loans, helping to tackle the problem of payday lenders that charge huge annualised interest rates of over 1000%.

 

  1. The French Post Bank, La Banque Postale has a mandate to increase access to financial services, including micro credit loans for those who have previously been financially excluded. It also plays an active role in providing education and information for people excluded from banking, particularly young people. Such services would have a profound impact on the British economy and help to level access to capital for individuals and small businesses alike.

 

Annex 1

 

Labour Conference

 

Composite 4 – Employment Rights

 

In the world of work we have seen a fundamental shift from fair and decent jobs

towards insecure employment models characterised by low pay, exploitative

contracts, bogus self-employment, umbrella companies and agency work. The result

of this is a country with growing inequality and in-work poverty.

 

Conference gives unstinting support for a fairer distribution of wealth across the UK

economy with good pay and conditions a cornerstone of high quality, secure jobs;

Conference supports collective bargaining and the current Living Wage in all sectors;

and Conference rejects the government’s sham plans for a cut price living wage.

 

Conference shares the concerns that agency and migrant workers are being

recruited and then exploited with inferior pay and conditions and deplores the action

of employers promoting this kind of employment.

 

Conference believes that vulnerable employment is damaging to the UK economy and society.

 

Following the second reading of the Trade Union Bill it is now essential that the

Labour Party puts forward a New Deal for Workers to address these issues and build

an investment and wage led economy.

 

This should include the following:

 

  • A Ministry of Labour to advance the interests of workers

 

  • Replacing the National Minimum Wage with a genuine Living Wage, provided toall workers and apprentices irrespective of age, taking into accountrecommendations from the Living Wage Foundation

 

  • The repeal of the Trade Union Bill and meaningful support for collective

bargaining

 

  • A new Employment Rights Bill that tackles insecure employment models

including zero-hours contracts, bogus self-employment, exploitative agency

work and jobs without basic rights like sick pay and holiday pay

 

  • the development of new employment measures which enshrine the rights ofworkers to receive decent pay and terms and conditions and ensures that allworkers are entitled to full employment rights from day one of employment

 

  • In addition to re-nationalisation of the railways and Royal Mail, new forms ofbusiness ownership and governance that provide employees with a greatervoice in how companies are run.

 

  • The abolition of Employment Tribunal fees

 

  • Provisions against double discrimination that were in the Equalities Act and

extend this to multiple discrimination

 

  • The criminalisation of non-payment and evasion of the minimum wage includingspecifically the retentions of any tips and the non-payment of travel time between work places.

 

Building on work already undertaken by the Work and Business Commission,

Conference agrees to establish a Working Group of MPs, trade unions and party

members to bring forward this New Deal for Workers to be published in advance of

Party Conference in 2016.

 

Mover: CWU

Seconder: UCATT

 

For further information on the view of the CWU contact:

Dave Ward

General Secretary

Communication Workers Union

150 The Broadway

London

SW19 1RX

 

Email:                      dward@cwu.org

Telephone:           (+44) 0208 971 7251

 

21st March 2017

[1]IMRG, Consumer Home Delivery Review (2016)

[2]  Media Literacy, Understanding Digital Capabilities follow-up, September 2013 and March 2014, BBC/Ipsos MediaCT, http://www.bbc.co.uk/learning/overview/assets/digital_capabilities_2014.pdf

[3] This is for everyone, the case for universal digitisation, Booz & Company, 2012, http://www.go-on.co.uk/wp-content/uploads/2013/12/The-Booz-Report-Nov2012.pdf

[4]CWU setting the agenda for working people at TUC day three, 13th September 2016, accessed on 12th December 2016 at: http://www.cwu.org/media/news/2016/september/13/cwu-setting-the-agenda-for-working-people-at-tuc-day-three/

[5] Composite 4 – Industrial Strategy, Labour Party Annual Conference, Liverpool, 26th September 2016

Labour BEIS Consultation 21 March 2017