As you sit down to read your latest copy of Tribune — hopefully with something stronger than a milky cup of tea — the chances are that like billions of items of mail sent over the recent weeks, it will have been delivered by your local postman or woman in Royal Mail. Five years on from the privatisation of the service, and the promises made for how it would safeguard it for the future, it’s a good time to take stock of what private ownership has meant.
As most people will recall, on the advice of many of the banks and hedge funds who were given priority status in buying up the shares, Royal Mail was massively undervalued when it was sold off, with the share price rising by 38 per cent on the first day of trading alone. This set the tone for a huge transfer of wealth from public hands to the very richest in society.
On prices — just as we have seen with other privatisations — Royal Mail was suddenly given the freedom to start increasing its prices in the run up to the sell-off of shares, fattening it up for new owners and relaxing the restrictions that would be placed on its natural monopoly. In 2012, prices rose by as much as 40 per cent and all too predictably they have continued to outpace inflation ever since.
Just as the CWU foresaw five years ago, these price increases have been accompanied by cuts to services. More than 100 delivery offices have now been closed as hundreds of millions of pounds of property have been sold off by Royal Mail — often for the development of luxury flats. For postal users across the country this means longer journeys, bigger queues, and huge inconvenience in getting hold of a parcel.
For staff, privatisation has meant 13,000 job losses, increasing pressure on workload, and the deterioration of working conditions. Royal Mail has started viewing the Victorian work practices of the likes of Amazon and Yodel not as a relic of the past but as a model for the future. It has only been prevented from going down this path by legal protections that were negotiated by the CWU following a dispute in 2013, and by the union’s Four Pillars campaign that saw 80,000 postmen and women voting for industrial action last year.
None of this, of course, is what we were promised five years ago when the Tories and the Lib Dems told us that selling off Royal Mail would bring new money into the service. We now know that this claim was a lie. Not only has investment been consistently lower under private ownership, Royal Mail itself has stated that it will be cutting investment further in order to fund dividend payments to its shareholders. All of this reflects the reality of privatisation and the extractive nature of private ownership today. In total, more than £1 billion has been taken out of Royal Mail by private shareholders since October 2013.
The pledge in the Labour Party’s 2017 manifesto — to renationalise Royal Mail at the earliest opportunity — represents a huge chance to address this situation and to deliver a positive future for the postal industry. But just as important as the commitment to renationalisation is the thinking that is going on behind the scenes to develop a new model of democratic public ownership for the future.
Our members fully appreciate the importance of this from their own experiences. Nationalisation is not enough. For many years when Royal Mail was in the public sector, it was run like a private business that just happened to be government-owned. This meant operating on purely commercial terms with no meaningful voice for the workforce and the public, and when letter volumes started to decline following the growth of the internet, it was these two groups that paid the price.
In fact, CWU members don’t have to look to the past to see the urgent need to overhaul the way that public services operate. One of the biggest victims of austerity has been the Post Office, which has been put on a path of managed decline over the past eight years following its separation from Royal Mail. In October 2018 a further round of backdoor privatisation was announced, with seventy-four of its flagship Crown offices due to be replaced by a scaled-down service in WHSmith branches.
In total, more than 200 of these flagship post offices will have been closed since 2013. This is despite huge public opposition: hundreds of thousands of people have signed petitions against downgrades that undermine their services, rip the heart from local high streets, and replace good jobs with part-time minimum wage employment. When these voices and the public interest are ignored, it’s hard not to think something has gone fundamentally wrong with the way public services are being run.
So, when we look to the future, the CWU is clear that we need a completely new model for both Royal Mail and the Post Office, one that gives workers and the public meaningful control and recognises the potential of these services through investment and innovation rather than by managing their decline.
Royal Mail is a key part of our infrastructure and it is the only organisation — public or private — that puts an employee on every street in the country six days a week. This is an incredible resource. Postmen and women are trusted figures in their communities and, in countries like France, this relationship is utilised, with postal operators working with local councils and providing care services. Expanding the role of postal workers in the community should be at the heart of Royal Mail in public ownership.
It should also be reunited with the Post Office. In its 2017 manifesto, the Labour Party committed to setting up a Post Bank, wholly owned by the Post Office and providing a full range of banking services in communities around the country. We’ve seen successful examples in France, Italy, and New Zealand, where similar initiatives have taken advantage of the post office branch network to play a leading role in lending to small businesses and tackling financial exclusion.
The opportunity, not just to address the failures of privatisation but to transform the future of our industry and economy, is what makes the shift we have seen in Labour under Jeremy Corbyn and John McDonnell so important. For too long we were told that there is no alternative. In 2019 we have to fight to deliver it.