Britain is facing its first national postal strike for 11 years after the Communication Workers Union called a one day stoppage a week tomorrow following the breakdown of talks over pay and Royal Mail’s modernisation plans.
The stoppage will hit postal services, Crown post offices and Royal Mail’s cash handling services – but sub-post offices will not be affected.
The union’s postal executive is also threatening further action within two weeks of the first strike.
“We have tried to reach an agreement but Royal Mail are refusing to negotiate,” the union’s deputy general secretary, Dave Ward, said. “In announcing this strike action, the union remains committed to reaching an agreement and we have given Royal Mail a further week to conclude a deal before any strike action becomes necessary.”
Royal Mail said the strike would only add to the competitive difficulties it was facing.
The company has already lost a number of high-profile contracts with key customers, including the Department of Work and Pensions, BT and a number of high street banks.
Earlier this week the online retailer Amazon said it was switching an £8m contract from Royal Mail to another supplier.
“Royal Mail will do all it can to mitigate the impact of the strike action but we are very disappointed for our customers at the disruption we are now facing,” chief executive Adam Crozier said yesterday.
“We remain very willing to sit down with the CWU to explain again the absolute need for Royal Mail to modernise and to underline how damaging a strike would be for postmen and women, and our customers.”
The dispute centres on Royal Mail’s latest pay offer and, crucially, its plans to modernise the business, including a £1.2bn investment programme.
Since the postal market was opened up to full competition at the beginning of last year, the state-owned group says it has lost 40% of the business mail market, which accounts for the 90% of Britain’s mail, to private sector rivals.
It argues that rivals, which have already invested in new equipment, are 40% more efficient as a result, and at the same time pay their workers 25% less than their counterparts at Royal Mail.
“We are losing business because we have failed to change and modernise. If we don’t modernise, the future for everyone in the company will look bleak,” Mr Crozier said.
Royal Mail has offered its workers, whose basic pay is £323 a week, a 2.5% pay rise plus up to £800 in performance related “dividends” as well as local productivity deals.
Two weeks ago a ballot of the union’s 127,000 members in the postal service rejected the company’s proposals and voted overwhelmingly in favour of strike action. The union says it is seeking a pay rise in line with inflation and to persuade Royal Mail towards a less draconian approach to its modernisation plans, which the union believes will cost 40,000 jobs over the next five years.
“We are not opposed in any shape or form to modernisation,” Mr Ward said. “What Royal Mail are doing is not modernisation. The truth is they are intent on cutting services, cutting jobs and cutting pay.”
Royal Mail’s direct postal rivals will be unable to take advantage of the strike because their mail is delivered by Royal Mail employees under so-called access agreements. They collect and sort their mail but then pass it on to Royal Mail for final delivery.
The key concern for both Royal Mail and its rivals is that customers who are hit by the strike may switch to using electronic communication. That was underlined last night when British Gas said it was launching a new marketing campaign, which will coincide with the strike, to persuade almost one million customers to switch to paperless billing.
Natalie Evans, head of policy at the British Chambers of Commerce, gave further emphasis to the challenge from electronic alternatives. “Any postal strike will weaken further businesses reliance upon Royal Mail and will act as another nail in its coffin as more competition arrives. This new postal strike will act as a further spur to small businesses to adopt e-commerce, which will mean less mail.”
Tonight, Guy Buswell, chief executive of Business Post, one of Royal Mail’s rivals, accused the CWU of taking shortsighted action. “This is a step back for the postal industry. It’s going to disrupt the overall mail market, which can’t be good for anyone.”
By Mark Milner, industrial editor
Thursday June 21, 2007
Guardian Unlimited