UK Royal Mail is warned of long-term danger as strike ballot looms

The government today urged Royal Mail management and unions to settle a pay dispute which threatens to escalate into a national postal strike.

The Department for Trade and Industry warned that a strike could do severe harm to the long-term prospects of the postal service.

But a spokesman for the department insisted that ministers saw the dispute as a “commercial matter” and would stay out of it for as long as possible.

The warning came as the Communication Workers’ Union prepared to ballot 160,000 members next week over proposed industrial action.

The union has said that a “Yes” result will be followed by immediate walkouts, in contrast to previous positive ballot results in recent years which have not been implemented. Strikes could begin around the start of October.

No talks are scheduled between management and the union but a CWU spokesman said the two sides could meet later this week. Royal Mail chairman Allan Leighton has tabled a pay offer which he claims is worth 14.5 per cent.

The union has complained that the offer has “more strings than the Philharmonic Orchestra” and that it is really worth just 4.5 per cent on basic pay.

Mr Leighton stepped up the war of words by threatening libel action over a CWU poster which claimed he “wasted no time in awarding himself a fat pay cheque and £3million bonus”.

A strike led by CWU general secretary Billy Hayes and his new, hard-line deputy Dave Ward would be a major setback to Tony Blair’s attempts to mend relations with unions following the damaging firefighters’ dispute this year.

A round of walkouts and strikes would also damage state-owned Royal Mail, which has a history of poor industrial relations and wants more efficient working practices to tackle losses of £750,000 per day and head off the threat from private rivals. The last national postal strike was seven years ago, under John Major’s Tory government.

According to the union, the only definite money on the table is a three per cent pay rise in October followed by a further 1.5 per cent next April.

It says it is also being asked to agree to 30,000 job cuts which it says would “destroy” the service to the public.

A Royal Mail spokesman said the offer of 14.5 per cent on pensionable pay was conditional only on “simple” productivity changes. It would take minimum pay to £300 a week and includes a move from a six-day week to five days.