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Industrial inaction at a bust organisation
The strikes at Royal Mail organised by the Communication Workers Union beggar belief. Here’s a company that will be technically bankrupt as soon as its ballooning pension fund deficit is announced later this year, which makes tiny operating profits that will now all have to go towards reducing that deficit and which is losing up to 10 per cent of its business to the internet, texting and other digital media each year.
The Government offered to take over the pension deficit if it could sell a stake to the private sector which would be able to provide much-needed investment and modernise the organisation. The union ran a successful campaign to fend this off, stirring up Labour backbenchers with warnings that a great British institution would be destroyed by flogging it to a foreign buyer or to private equity. Having won a delay in the reform, the union is now doing its best to destroy Royal Mail with strikes that will only accelerate its decline.
What must be preserved is not Royal Mail as an investment-starved state-owned dinosaur. Nor should the jobs of posties who do work that machines do everywhere else in western Europe to sort mail before delivery be preserved. It is the universal service, delivering letters at a flat-rate price anywhere in the UK six days a week, that must be preserved.
That needs more investment, greater efficiency and freedom to innovate. Yet this cannot happen under the ownership of the state which is rightly barred by European law from subsidising domestic businesses against competition from the rest of the EU. Partial – better still total – privatisation is the way forward, which also would allow the government to take over the historic pension deficit and preserve the pensions of posties long since retired.
Yet the union is instead driving Royal Mail into the ground in defence of state ownership which has so failed its members in the past. Speeding up privatisation is the only response – it is only in the public sector that such union madness prevails.
John Willman is an award winning journalist. An economic commentator, author and former Associate Editor of the Financial Times. For more information or to contact John Willman, click here.
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Back in 2001 Neville Bain the shabbily treated Chairman of Consignia as the PO was then branded, went to the government with proposals to shed 30,000 jobs from the workforce predominantly through natural wastage. He was told that the government would not consider this as a viable part of any plan. Worse still, Dr Bain who had made it clear that he did not want to renew his contract when it expired was double crossed by then Trade Secretary Patricia Hewitt who released the story that she had decided not to his contract because the service provided by the former Post Office was simply not good enough.
Unions have achieved the destruction of many of Britain’s great industries and are run by leaders of little skill and almost zero commercial ability, the role of the union in the 21st century has changed, Margaret Thatched took them to the vets in the 80’s, yet the Labour government have handed power back to them. Break these outdated business killers and break them now.