Plans to privatise Royal Mail are based on flawed research and assumptions, the main unionrepresenting its workforce claimed yesterday.
Dave Ward, deputy general secretary of the CWU, told the Future of UK Postal Services conferencein London that Royal Mail had made huge progress in modernisation since the firstgovernment-commissioned report on the company by Richard Hooper, two years ago. But Hooper hadfailed to recognise this in his updated report this year, which forms the basis on the newgovernment’s plans to determine the future of the state-owned postal operator, he said.
Ward said he agreed with the first Hooper report, which diagnosed the problems the company andthe UK mail sector faced, but claimed his second and third reports were intended to make the casefor privatisation, rather than the original aim to look at the options available.
“We believe the Hooper report is based on flawed analysis, and that any serious look at it by aserious academic would support that,” Ward claimed. “We have never understood the methodology, andwe do not believe the numbers are accurate.” Comparisons made in the report with other postaloperators were not done on a like-for-like basis, in terms of pricing, service standards, levels ofinvestment, and the regulatory regime in which Royal Mail operated, the union leadersaid.
Ward acknowledged that Royal Mail needed an injection of capital and that the government was notin a financial position to provide this. “But there are other ways to do this,” he added. “Ourcontention is that privatisation is not the answer to maintaining the universal service (USO). Thisis not about public equals good; private equals bad. It is just about the commercial realities: atsome point, if you remove the government’s say, commercial decisions will be taken that underminethe USO, because they will have to provide a return to shareholders.”
Responding to the comments, Hooper told the conference: “For the CWU to accept the need forprivate capital is a significant move forward. The area of disagreement is on where that privatecapital comes from. My view is that private capital will save the USO; CWU’s view is that it willdestroy the USO. But there are many examples of privatisation of postal operators – for example inDenmark, Belgium and the Netherlands – and these are the companies that are successfullydiversifying.”
Ward said the latest agreement between staff, union and Royal Mail had created a veryconstructive relationship that was about delivering a shared vision, and he praised Royal Mail’snew CEO, Moya Greene, the former head of Canada Post who was appointed in July. But he believed theagreement was not recognised by government, something that endangered the progress that had beenmade.
Ward said the CWU supported government plans to fix Royal Mail’s problem areas of the pensiondeficit and the regulatory structure. “In fact we feel it is not going far enough,” he added. “Butif you want to privatise an industry, you have to do those things first, and then give us anopportunity to get these other things right. We are going to run a campaign on this basis, andbecause we believe the government does not understand what our agreement means.”
Ward said it was also wrong to claim the CWU was resistant to change, saying that he hadrepeatedly asked Royal Mail to develop new products, and that its failure to do so had held thecompany back. “If people spent half as much time on developing innovation as they have spent ondownsizing, then things would be different,” he said.
Asked whether, in the event that privatisation did take place, CWU would prefer it to be an IPOor a single investor, Ward responded: “I believe that there are people in the coalition governmentthat are sceptical about this Postal Services Bill, and we are going to focus on these people. Butif it [privatisation] happens, then I would imagine we would be arguing that if it is good enoughfor Post Office Limited to become a mutual, then it is good enough for Royal Mail to become amutual.”
