Speech by Billy Hayes, to UNI postal conference, September 7 2011

9 September 2011

Speech to UNI Postal Conference, Washington 7 - 9 September 2011

In June, the Coalition Government in Britain secured Parliamentary approval for the sale of Royal Mail.

The new Postal Services Act allows for the complete privatisation of Royal Mail, whilst keeping the Post Office Counters Network as a separate publicly owned company.

Royal Mail is profitable, while the Post Office Counters Network is loss making – and actually received a Government subsidy of £150 million a year.

The CWU engaged in an extensive campaign against these proposals. We organised outside and inside Parliament.

Our campaign had two major aims – firstly to try and prevent the Act being carried – and secondly to secure as many safeguards in the legislation as possible.

The Government has a Parliamentary majority of 84, and the Government parties secured 60% of the popular vote in the 2010 General Election.

Clearly it was always going to be difficult to defeat such Parliamentary arithmetic.

We organise many events inside Parliament – including meetings and lobbies with MPs and Ministers. Our branches also organise many local meetings and lobbies with MPs.

We organised demonstrations in a number of constituencies – including those of the Prime Minister, the Deputy Prime Minister and Ministers responsible for Royal Mail. These are well attended and popular events.

We worked very closely with all of the opposition parties inside Parliament – including the Scottish and Welsh Nationalist parties and all of the parties from Northern Ireland.

Our main link was obviously the Labour Party. We secured their complete support at every stage of the campaign. This was despite the fact that the diehard Blairites support privatisation.

But Labour's front bench worked well with us, and helped to popularise the campaign.

In the end, we were unable to create the pressure needed to split the Coalition on this issue.

But we did have a lot of success in securing policy amendments to the Bill. Altogether, we helped to draft and get placed over 200 amendments against the Bill. Not all of these were successful – but we did secure some notable victories.
At the start of the campaign, the Government conceded that:

• The Pension Fund deficit would be taken on by the Government – the current estimate is over £4 billion
• And £1.34 billion of Government money would be provided to support the industry up to 2014/15

During the passage of the legislation, the Government conceded our claim that Royal Mail as the universal service provider should be allowed a “reasonable commercial rate of return.”

This was very important – as at present, the industry's regulator has no obligation to ensure that the universal service provider can compete commercially.

The Government also conceded that Royal Mail would continue to be the universal service provider for at least 10 years.

The legislation originally contained no commitment to Royal Mail to keep the USO. Indeed the legislation assumed that the USO would be provided by more than one provider, in the country as a whole, or in part.

We also got a commitment that there would be no change or reduction in the USO standards for the duration of this Parliament – that is until 2015. There is a serious lobby to drop our 6 day delivery service, and the uniform tariff. This lobby has been defeated for the foreseeable future.
A great concern for us is the split between Royal Mail and Post Office Counters. We believe that a privatised Royal Mail will not want to use a publicly owned, and loss making, Counters Network.

Instead, Royal Mail, if privatised, would want to use private retail networks.

However, the Government has been forced into a commitment for the longest legally permissible contract between the two businesses. The Government has said that it hopes this will be for 10 years. This gives great stability and guarantees against widespread Post Office closures in the future.

There are many other lesser commitments that we won, but in total we believe we have won major concessions for postal workers, and for the public's postal service.

Now, the Government still has to actually sell the company. This may not be so easy. Firstly, the concessions we secured mean that the Government has to obtain clearance from the European Commission under EU state aid legislation. This will take a number of months, certainly until next Spring.

On top of this, the economic situation is so bad that it may well be difficult to find buyers for the company. Many investors may be put off by the decline in the mail market.

And many investors may be put off by the fact that we have secured so many commitments to public service in the legislation, which run against simple profit maximisation.

A further obstacle is the fact that the Union is very well organised with over 90% of the workforce in membership. Many investors will think that it may not be a good idea to buy a company where the workforce is well organised and very militant.

So, despite the setback in Parliament, we are continuing to fight against privatisation.

Politics is uncertain, and if we can hold out long enough then perhaps the Government will fall. All we know is that if you fight you get a better result than if you give up.

Thanks for listening.

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