Big investors, and a fair few middle-class people who can afford £750 to bid for shares, stand to make large windfall gains as Royal Mail shares are allocated and start trading, from 15 October.
The government has deliberately set the share price low to get a successful sell-off, and the moneyed classes are confident that new private bosses will be able to get good profits by beating down postal workers’ pay and conditions.
On 16 October the postal workers’ union CWU will announce the result of a ballot on strikes to win guarantees on terms and conditions. However, the union’s campaign so far has been far too defensive.
The story of the campaign against Royal Mail Privatisation by the CWU starts over 13 years ago.
When Derek Hodgson was General Secretary the union went along with the liberalisation proposals of the 1997-2001 Labour government in the Postal Services Act 2000. It did so on the basis that the publicly owned Royal Mail (where the majority of postal CWU members work) should be free to compete in the liberalised postal market. The liberalisation of the postal sector in the UK was undertaken by Labour well in advance of legislation on liberalisation from Europe.
AWL members who were CWU activists at the time opposed the proposals. The opportunity to argue a workers’ case against liberalisation and competition and instead for proper public planning and investment was lost.
The framework for future privatisation was in place from then. The “private sector disciplines”, i.e. cost cutting to be competitive, were used, with the result that there was pressure to reduce Royal Mail employees’ terms.
There were closures of major Mail Centres, and rounds of job cuts, as well as an increase in temporary and casual workers.
This experience contrasts with that of the privatisation of BT where the share sale happened in advance of the development of a fully liberalised market. Though the telecoms privatisation took place in 1984 it was not until the early 1990s that there were major job cuts.
The postal regulatory structure brought in after the Postal Services Act mirrored the consensus in other utilities – that the major player (in this case Royal Mail) has to meet universal obligations on access for a fair “playing field”. This rigmarole is in reality about giving guaranteed profits to new entrants to the market, which can choose the most profitable areas of the business.
The CWU has undertaken recruitment drives in the various private firms operating in the sector, but too little too late. Other unions have already got members and in some cases recognition in these firms.
Late in the life of the last Labour Government Peter Mandelson followed through the logic of liberalisation, and pushed for part privatisation. By then the union had a different leadership under Billy Hayes, who was in principle against the model of liberalisation and privatisation. A vigorous and successful campaign was undertaken, which included fighting within the Labour Party.
Since the 2010 election, though, has sought only to achieve ameliorating amendments to Con-Dem legislation. Both Coalition partners are in favour of postal privatisation, the Liberal Democrats having a worse track record on this than the Tories!
The CWU campaign has recently focused on a boycott of the private companies who compete with the publicly owned Royal Mail. This has gone down well with union members and has rallied opposition, but it is a mistaken strategy long term because it conflates postal workers’ interests with those of Royal Mail, which operates as a business within a liberalised market.
A motion for renationalisation was overwhelmingly passed at Labour Party conference.
But shadow minister Chukka Umunna refuses to give a clear position. It’s like going through the motions... and the share sale is going ahead.
The current campaign of the union accepts in effect there is no alternative to a “company union” approach. You can’t keep postal services public without arguing positively for public postal services, including greater public investment, and against the liberalised model.
To keep the sector unionised the CWU needs to appeal to all workers in the postal sector on the basis of class solidarity.