It has issued a Directive on privatising postal services. One of its bureaucrats is even on secondment as a PostComm commissioner. And its own man, Mandelson, is involved…
The roots of the current attacks on the workforce of Royal Mail lie not in the internet or the increased use of e-mail, but in the European Union Directive 97/67/EC which specified the rules for the development of the internal market for EU postal services. Like all such EU directives, it was intended to provide more markets, more opportunities for a dying capitalist system to make money at our expense.
The Royal Mail and the Post Office are institutions close to the heart of ordinary people because they provided us with a reliable service and operated on a universal basis.
Just as the NHS was intended to provide free health care to all so the Royal Mail would deliver mail to any part of the country for the same price and the Post Office would provide basic financial and postal services to all, locally, without the mentality of a predatory bank.
How the EU rigs the market
New rules introduced by Royal Mail in August 2006 called “Pricing in Proportion” required post items to be priced by size as well as weight.
The rules resulted from EU legislation designed to harmonise postal services, namely the Postal Services Directive (97/67/EC) “on common rules for the development of the internal market in Community postal services”, designed to liberalise the EU’s postal services by opening them up to competition. Private companies have been allowed to take the most lucrative of the postal services market with Royal Mail losing 40 per cent of its bulk business mail.
So far only Britain, Finland and Sweden of the 27 EU member states have introduced full competition in their postal services. This would mean, for example, that a Dutch service provider could operate and compete here but the Royal Mail could not do so in Holland. In addition EU state aid rules place limits on the level of subsidy that can be given to rural post offices.
Perhaps they think that this kind of service is too good for us. More likely, capitalism sees in public services like these the opportunity to make a killing at our expense. All that capitalism needs is the mechanism to pass laws to put their plans into operation. They have this mechanism in the European Union.
In response to EU Directive 97/67/EC, the British Government set up PostComm, the Postal Services Commission that describes itself as the “independent” regulator for the postal market. It describes its functions as a) protecting the Universal Service to guarantee daily deliveries and the principle that anyone can post a letter to any part of the country for the same price; b) licensing postal operators; c) introducing com-petition into mail services; and d) regu-lating Royal Mail. PostComm opened the market to private bulk mail services in 2003 and the full market in 2006.
So this “independent” body decides which lucrative parts of Royal Mail will be hived off to the private sector such as TNT, UK Mail, DHL, DPD, etc.
So who exactly are the PostComm Commissioners? Well, here’s just a few of them, past and present, just to give you a flavour of their “independence”.
Appointed on 1 January 2008 on secondment from the European Commission, Ulf Dahlsten is a former Director General of the Swedish Postal Services and was actively involved in the deregulation of Swedish postal, taxi and telecom services. He was chairman of TNT Express Worldwide as well as a director of Stena Line and of SAS.
PostComm Chairman Nigel Stapleton is a non executive director of the Reliance Group which provides outsourced security services to Royal Mail. He is also an independent director of KazPost, the Kazakh postal service and Samruk Energy, a Kazakh electricity generating company.
Chief Executive Tim Brown, the former Marketing Director of DHL, joined Royal Mail from KPMG where his work included a review of the future of Royal Mail for the government. His son holds a senior position in TNT Express.
Commissioner Professor Stephen Littlechild is described as an “international consultant on regulation, competition and privatisation” and an adviser to governments and the World Bank.
Commissioner Simon Prior-Palmer was an investment banker with Credit Suisse.
Commissioner Tony Cooper is the father of Yvette Cooper, Chief Secretary to the Treasury and consequently father-in- law of Ed Balls, Secretary of State for Children, Schools and Families, who is also Gordon Brown’s closest ally.
Commissioner Wanda Goldwag is adviser to private equity firm Smedvig Capital.
After PostComm invited private mail companies to take on the more lucrative parts of Royal Mail on 1 January 2006, the management demanded far-reaching change from the workforce that would result in 60,000 job losses and extensions to the working week.
TNT and UK Mail were consequently allowed to strip revenue from Royal Mail. For example, the profit on a single posted letter before PostComm was established would have been in the region of 10p. Royal Mail now makes a maximum 3p down to a loss of 2p on delivering TNT’s mail (see Box, How the EU rigs the market).
Thursday 22 October: Pickets gather outside the Tyneside Mail Centre|
The Communication Workers Union (CWU) went on strike in 2007, resulting in a “truce” between a macho, bullying Royal Mail management and the workforce. Under this truce, changes in working practices were to be implemented through consultation with the workforce. Encouraged by Business Minister Peter Mandelson, Royal Mail management stepped up its attacks on the workforce, demanding more work, heavier loads and longer rounds, sacking staff for trivial offences and deliberately provoking the CWU.
More recently, Lord Mandelson of Foy and Hartlepool, First Secretary of State, as he is now known, proposed the part privatisation of Royal Mail. He tried to blackmail the CWU by saying that the government would only cover the £5 billion black hole in the Royal Mail pension scheme if it accepted this privatisation.
The “black hole”, of course, was caused by the government in the first place. Prime Minister Thatcher declared a “pension holiday” in 1990 which lasted until 2003. This meant that the government did not pay its contributions to the pension scheme while Royal Mail workers did.
The situation was made worse by Gordon Brown’s first budget in which he abolished tax relief for pension funds. And then the financial collapse of last year caused by Brown’s light touch regulation saw billions wiped out from pension funds. During this same period, the government failed to invest in Royal Mail’s infrastructure.
Going the final mile
Those rubbishing the postal workers cannot decide whether the service is irrelevant because everyone uses the Internet or whether the strike is causing huge disruption. And despite opening up postal services to private “competition”, many private companies still rely on the Royal Mail network of sorting offices and postal delivery workers – “the final mile”. This is the really expensive bit, which the public appreciates and wants to defend.
Some other facts:
Mandelson was thwarted in this attempt to privatise Royal Mail by a successful campaign by the CWU. He then gave the nod to Royal Mail managers to step up the attack on the CWU. The result was a response from the CWU, which called for local synchronised industrial action, withdrew from local consultations and subsequently successfully balloted for national industrial action, whilst all the time offering to involve third parties such as ACAS.
So what does the EU, acting on behalf of capitalism, have in store for us in terms of a postal service?
If Royal Mail tries to deliver a parcel to a home when the occupants are at work or out of the house, they will leave a note advising that the package is at their local sorting office a short distance away. It is a public service.
If, say, competitor DPD finds itself in the same situation, they will leave a card telling you to phone a telephone number to rearrange delivery on another day when you will have to wait in the house from 07.00am to 20.00pm. You can opt to have it delivered on a Saturday, but you, the recipient, will have to pay a surcharge of £10 for the privilege. It is impossible to speak to a human being on the phone number and if you miss the second attempt, they will return the goods to the sender. This is just a small example of “modernisation” or “efficiency”.
So what we are witnessing is the direct result of a decision (the Directive) made by the European Commission, over which the British people and Parliament have had no say, over which the Royal Mail workforce has had no say.
The workforce is responding in the only way they can – by resistance. But with all three Parliamentary parties now having declared war on workers at their recent conferences, outbidding one another with promised “cuts”, we have to assume that what is happening to post workers now will be every other worker’s lot in the near future – unless they fight to prevent it.