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Postal Services The year they privatised Christmas

I STARTED working for the Royal Mail sometime after the turn of the millennium.

It was a job I had always wanted. Healthy, out in the fresh air, involving at least four hours a day of intense exercise, and a degree of autonomy, with no managers looking over my shoulder — at least while I was out on my round — it was the perfect job. It still is in many ways.

The basics of the job haven’t changed. I still walk from one address to the next, sticking letters through letter boxes. What can possibly go wrong?

Well, a lot actually. They can destroy the industry by undermining the pension, introducing a form of fake competition, and then privatising it.

The pension was undermined between 1990 and 2003 when the company took a pensions holiday, failing to pay its share into the pension pot. They could not possibly have done this without the agreement of the government. This left an £8 billion pension deficit, later rising to £10bn, which the government used as a way to begin the privatisation narrative. 

“Look, the Royal Mail is failing,” they said, “we need to privatise it.” It nationalised the liability, taking the pension deficit in-house, while beginning the process of selling off the assets on the cheap to its mates in the private sector.

Competition was introduced in the wake of the third EU Postal Services Directive of 2008, which required all postal markets to be opened up to other companies.

I say fake competition because how can you introduce real competition into what is, in its essence, a natural monopoly?

The Royal Mail — or Post Office, as it was more commonly known — had only ever been in the public sector during its entire 500-year history.

It had created the whole distribution network — the systems, the methods, the procedures — as a seamless unity. Indeed, there’s a good argument to say that the Royal Mail is responsible for the creation of our modern-day nation. It brought together the different parts of the country by giving everyone an address and a post code, accessible to all for the price of a single stamp.

How can there be real competition when one company, and one company alone, is required, under the universal service obligation (USO) to deliver to every address, no matter how remote, in the whole of the United Kingdom: not only from Land’s End to John o’Groats, but from the Scilly Isles to the Outer Hebrides, from the Isle of Wight to the Isle of Man?

It’s easy to make a profit delivering from city to city, from London to Manchester to Glasgow, or from district to district inside the same city; much harder if you take in all the towns and villages as well; almost impossible if you include every isolated cottage, croft or farmstead in between. Only the Royal Mail is obliged to deliver to all of these.

The way they engineered the competition was through a process called “downstream access.” Previous privatisations gave access to the industry network — the electricity grid, the water pipes or the gas pipes — to all the rival companies on an equal basis.

In the case of the postal industry the equivalent of this was us: the postal workers on our rounds.

So the Royal Mail’s rivals were allowed to bid for the bulk mail and city-to-city contracts of all the main services — the banks, the utilities, the NHS, Amazon, eBay and all the rest — and then expect us to deliver it for them.

In other words, in this industry, me and my labour — my living, breathing, heart-pumping, energetic body — is viewed as the equivalent of the tangles of copper wires or the networks of underground pipes that serve as the infrastructure in other parts of the economy.

Even then the other companies would have been unable to make a mark. The Royal Mail was too big and too well-established. It could have crushed the other companies underfoot. So the government introduced a principle called “headroom.” When the Royal Mail charged the other companies for its downstream access services, it was obliged to leave financial space for them to make a profit.

So there was never a “free market.” It was a highly regulated market from the outset: that is, the Royal Mail was regulated in order to allow the other companies the freedom to compete with each other.

And then there was privatisation, which took place in October 2013, as I’m sure you all remember.

Part of the justification for this was that people’s habits were changing. People didn’t send letters any more: they sent emails and texts instead.

If you listen to Royal Mail bosses, they will tell you that there has been a 40 per cent drop in mail volumes in the last 10 years. This might be true, although there does seem to be a marked increase in advertising mail at the same time.

But the one thing they failed to mention was the increase in packets. The same technology that has effaced the ancient and noble art of letter-writing — never something the majority of the population engaged in anyway — has also, at the same time, allowed us to buy our goods online.

This has been by far the greatest shift in the industry since the onset of the digital revolution: the sheer number of packets we carry, a much more profitable enterprise.

I can’t believe the government hadn’t predicted this when they decided to sell off the Royal Mail, or that experts in the industry weren’t already aware of it.

In other words, it’s been one giant-sized con from beginning to end.

The other element that comes into this has been the separation of the Post Office from the Royal Mail.

The Post Office has always made a loss. The Royal Mail has always made a profit. By retaining the Post Office in public hands, while selling off the Royal Mail, they’ve ensured ever-increasing profits for the private sector, and ever-increasing burdens for the public.

There’s been extraordinary pressure on Post Office Ltd, the government-owned company that runs the counters that sell you your stamps, to cut costs and make efficiency savings. What this has meant is that post offices are being franchised out into supermarkets, where the staff are paid at retail trade rates under minimum hours contracts, rather than the well-paid and secure jobs that skilled post office workers used to command. The Post Office is no more than a minor adjunct of the retail industry these days.

Most post offices are also grossly understaffed, which has meant massive queues this Christmas… and for all Christmases to come, unless the industry is brought back together again.

I’ve called this piece The Year They Privatised Christmas because the Royal Mail was always an integral part of the Christmas story.

Still is. We deliver all your Christmas cards and most of your parcels. All holiday rights are cancelled for the season, and most postal workers — at least in the past — were willing to go into serious levels of overtime to get the job done. Our MP always comes down to the office to congratulate us on our work.

We are like modern-day Father Christmases in our red vans, wrapped up against the cold in our red fleeces, delivering presents to your door.

By privatising the Royal Mail the government has effectively privatised Christmas.

It has turned me into a mere utility: an overground delivery system without a will of my own.

The management may not be looking directly over my shoulder, but they make me carry a PDA (postal delivery assistant, or tracking device in laymen’s terms) which tells them where I am and where and am heading every minute of the day.

They make me work harder and faster for the same basic wage. They are constantly ratcheting up the pace and the workload, to make sure I do more work in the same number of hours. They have degraded me and degraded my job in order to squeeze out more profits for their shareholders.

So you won’t be surprised to hear that most of the goodwill is gone. Postal workers are less and less likely to go into overtime. We are less and less likely to want to do management any favours.

That’s why we voted so overwhelmingly to strike in October — 89.1 per cent in favour on a turnout of 73.7 per cent — not only to secure our pensions and our jobs, but also to secure the future of the Royal Mail — and Christmas — for all.

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