The CWU and the Sale of Royal Mail

The Communications Workers Union held a livestream in the late afternoon of Wednesday 15th May to report to members on the latest developments in the proposed takeover of Royal Mail by Czech billionaire Daniel Kretinsky.

According to Sky News, EP Group, the investment company which Kretinsky controls, has made a second and improved offer to Royal Mail, valuing the entire company at around £3.5bn. Royal Mail has said that it is ‘minded’ to recommend acceptance of the offer, although the final sale and their removal from the Stock Exchange will only be confirmed after a vote of the shareholders. Given that the value of each share in Royal Mail has risen by around 70% since the possibility of a buy-out of the company was raised, it appears inevitable that the shareholders will take the money and run.

The transformation of Royal Mail from a publicly-owned and run utility to a private company and then to, in all probability, a British public service owned and controlled by a foreign national, is not only a manifest example of the utter folly that is privatisation, but it will also bring with it yet more serious concerns for the tens of thousands of Royal Mail workers who have already been through a tumultuous two year period of rationalisation, strike action and the capitulation of their trade union, the CWU, in their year-long dispute with Royal Mail in 2022 and 2023, all the while as Royal Mail paid out handsome dividends to its shareholders caring nought about the ongoing viability of the company or the future for its staff.

In the livestream, Dave Ward stated that it was Royal Mail’s contention that this proposed takeover was made possible by the failure to relieve the company of what is known as its Universal Service Obligation (USO). The USO obliges Royal Mail to deliver mail to every corner of the country on a six days per week basis. Ofcom, the regulatory body under which Royal Mail operates, has reported that, in order for Royal Mail to remain a viable entity, the USO must be curtailed to five or even three days per week. This would mean that, on at least three days per week, Royal Mail would be under no legal obligation to deliver mail, which would be a hammer blow to people living in more isolated areas of the country who would be the first to see a curtailment to their services.

Dave Ward and the CWU’s position is that, rather than the USO being the problem, Royal Mail’s own management and the manner in which they have run the company is to blame for the decline which the company has faced and the parlous state that they find themselves in, too weak to resist a potential takeover from a foreign investor. Ward is correct in this assertion. The Royal Mail management have paid out generous dividends to shareholders while at the same time ignoring workers’ concerns about the gradual degradation of the quality of the services that they provide. Royal Mail’s management have also repeatedly and routinely ignored feedback from their own staff on how to better run the company, determining instead that, as they are in charge, they are best placed to decide what is best for the company.

However, viewers of the video would have been shocked to hear Dave Ward, when discussing the possibility of bring Royal Mail back into public ownership, saying that “we have to acknowledge in the current environment that will be difficult”. There are all sorts of interpretations that could be made of this statement, but the most feasible one is that, with a General Election to take place before the end of 2024, the Labour Party will not countenance bringing Royal Mail back into public ownership. By using the term “in the current environment”, Dave Ward in all likelihood meant that any incoming Labour Government would not, in any way shape or form, pay the £3.5bn that it would cost to prize Royal Mail from the grasp of the current shareholders.

Of course, what Dave Ward should have said, as many trade union leaders of the past would have said, is that Royal Mail should be nationalised immediately without compensation. The robber barons who have throttled the life out of Royal Mail have already received millions of pounds in dividends and deserve not a penny more from the state. Yet instead of making this legitimate and wholly justified demand, he offers vapid alternatives for ownership such as mutualisation, not-for-profit and ‘public benefit companies’ (whatever they are), that Ward said that the CWU “had been exploring with the Labour Party” – a clear acknowledgement that it is the Labour Party itself which stands in the way of the full nationalisation of Royal Mail. Yet the CWU will continue to line the coffers of this wretched party to the tune of hundreds of thousands of pounds every year regardless.

Whilst it is true that the management of Royal Mail are to blame for the atrophy of the company, the CWU leadership themselves were seriously lacking in candour with regards to the self-inflicted collapse in their dispute last year and the resulting demoralisation that this has caused in the rank and file of the CWU in Royal Mail. Martin Walsh acknowledged that the hangover from CWU’s complete capitulation in July 2023 had still not cleared, but the CWU was the only group involved in the maelstrom surrounding Royal Mail that was on the side of the workers. This will be a difficult position to sell to members of a union which took eighteen days of strike action in 2022 to support a fair claim for a pay rise during one of the worst cost of living crises seen in this country since the 1970s, yet failed to call their members out on strike for a single day in 2023, despite receiving a huge mandate for strike action at the close of 2022.

Dave Ward was less circumspect than his deputy when workers, who contributed to the live chat during the broadcast, said that they had sacrificed up to eighteen day’s pay only for the CWU to agree to a deal that was almost completely indistinguishable from the offer which brought about the industrial action in the first place. They went on to state that, if Royal Mail was there for the taking by a venture capitalist, it was the weakness of the CWU itself which was a contributory factor to this situation.

Ward described this as “complete nonsense”, stating that members who held this view “show[ed] a complete lack of understanding of the way the world works”. It could be interpreted that, by ‘the way the world works’, Ward was claiming that these members had limited understanding of the capitalist system that we live within. In making this glib statement, Ward demonstrated clearly to the members that pay his wages just how detached from reality he has become in his well-remunerated position which he has occupied for the last nine years. Workers understand the way that the world works far better than any trade union bureaucrat because they live in it and see it with their own eyes every single day. Ward’s cack-handed response should not be ignored or forgotten by CWU members, be they in Royal Mail or anywhere else.

Ward was also wrong in his assertion that the CWU members could not deter a billionaire investor from making a bid for Royal Mail. This, frankly, is nonsense. Had the CWU shown more militancy, not only during its failed dispute with Royal Mail but in its day-to-day engagement with Royal Mail, then it would have arguably acted as a strong disincentive to any would-be speculator hoping to buy the company, break it up and introduce agency staff and other measures to drive down costs and increase profits.

The truth is that any assertions that the CWU will be the only show in town when Royal Mail will be bought up and broken up will find short shrift among workers who are still feeling as bitter and betrayed by their own trade union now as they did in July last year when the CWU leadership delivered the coup de grace on their industrial action. Members warned the CWU hierarchy at the time that their capitulation would cost the union for years to come and that Royal Mail would capitalise immediately on their weakness, a warning which was unheeded and proved to be completely correct.

But the livestream did reveal what really motivated the CWU’s leadership to so readily collapse in 2023. Martin Walsh stated that the leadership were faced with two decisions – to accept a deal or face Royal Mail being plunged into administration. On a Class Consciousness Project Twitter livestream which took place shortly after CWU’s collapse, I said that I believed that the leadership of the union had possibly been “spooked” (my phrase) by the Royal Mail management into accepting the dreadful offer that was put before them by the threat of the company either being forced into administration or liquidation. Walsh stated in the livestream on 15th May that this was exactly what had happened – he said that, if Royal Mail had gone into administration, then 30,000 workers would have been made redundant ‘overnight’.

Consider for a moment whether this threat was in fact real: That a publicly-owned utility, in existence since the 16th century, would be put into administration only ten or so years on from being privatised by essentially the same Government which privatised it in the first place? The political consequences of such a thing would have been disastrous for the Government and they would have known this. Whilst administration was not impossible, it appears incredible that the CWU’s leadership, unless they were privy to information that nobody else has seen, could have genuinely believed that Royal Mail would have brought in the administrators and the threat was in fact nothing more than that – a threat.

The CWU should not in themselves be blamed for the privatisation of Royal Mail. The blame for this should lie at the feet of the Conservatives, the Liberal Democrats AND the Labour Party, which the CWU blindly and obediently bankroll. But the sorry state that Royal Mail finds itself in and the fact that a capitalist speculator, with cash on the hip, has the best possible opportunity to buy it up wholesale and then embark on a bonanza of fracturing, contracting-out and profiteering, is at least partly the responsibility of the trade union whose sole responsibility was to act in the interest of its members.

The CWU leadership, or at least some of them, acknowledge that there will now need to be a period of bridge-building to the rank-and-file membership, who still feel betrayed at the collapse of the strike last year. Indeed CWU’s Annual Conference in April moved a motion which set this as policy. The question will be if this will be enough. Morale amongst the staff in Royal Mail is in tatters and turnover is at a high not seen since the last 1980s.

The CWU bureaucracy must acknowledge their part in this, not accuse their own members of talking nonsense or being out of touch with reality.