Royal Mail heading for first national strike in a decade

Britain is heading for its first national postal strike in more than a decade after pay talks broke down between Royal Mail and its unions.

The Communications Workers Union announced yesterday that a ballot for industrial action would go ahead after it formally rejected a 2.5 per cent pay offer from Royal Mail linked to further efficiency gains. The union fears that Royal Mail is planning up to 40,000 job losses.

The CWU will serve notice of its intention to ballot its 130,000 members in Royal Mail on Tuesday and despatch ballot papers a week later. The result is due to be announced on 7 June. The last national postal strike was in 1996.

Royal Mail executives said the union’s pay claim was “clearly madness and not in our view justified in any way”. The company said that the claim for a 27 per cent increase coupled with a reduction in the working week would cost it GBP 1bn a year at a time when its profits had shrunk to just GBP 22m for the first six months and the UK mail market was declining by 2.3 per cent a year.

Royal Mail also claimed that its staff were paid 35 per cent more than those working for rival postal companies, if pension benefits were taken into account, while productivity within the state-owned organisation was 40 per cent lower than that of its competitors.

The company said it did not believe the pay claim would be supported by customers or taxpayers. “The union must also realise that the consequences of meeting its demands would be hugely negative for Royal Mail’s competitiveness and would result in further large job losses as well as the loss of vital contracts and revenue.”

Royal Mail said that the union had failed to grasp the commercial reality that by the end of this year, 20 per cent of all bulk letter business would be handled by competitors who were much more efficient and productive.

The CWU said that Royal Mail’s latest business plan, of which the pay offer forms a part, was “short-sighted and defeatist”. It said the company’s “full and final offer” contained either a 2.5 per cent pay rise or an unconsolidated one-off lump sum payment of GBP 600 but not both. It also said that the offer was hemmed in with conditions including the scrapping of night shifts at delivery offices, later start times and reduced weekend operations.

Dave Ward, the union’s deputy general secretary for the postal service, said Royal Mail’s business plan amounted to “a cost-cutting frenzy”.