Something that hasn’t been mentioned much in the post-privatisation analysis is the amount of money the Royal Mail stands to make out of its immense property holdings. One building alone in the company’s portfolio of disused offices in London – the mail centre in Nine Elms Lane – has been valued at half a billion pounds. That’s one-sixth of what the government sold the whole company for.
The office was closed in 2012, more than a year before the sell-off. And it’s not the only one. Dozens of delivery offices up and down the country, including mine, were closed in the run up to privatisation. Several of them remain unsold.
Could the offices have been kept empty on purpose? Royal Mail bosses now stand to make a lot of money out of the company they once used merely to manage.
One of my neighbours came over to say hello the day the Royal Mail was privatised.
‘I expect you’re looking forward to getting your hands on all that money you’ve just made,’ he said. The shares allocated to me as a member of staff had gone up by almost 40 per cent in a day. The government had brought forward the date of the IPO in order to beat a strike ballot by the Communication Workers’ Union. Most of us, like most people, were against the privatisation. It felt like my neighbour was congratulating me on taking a bribe.
I lost my temper, and told him what I really thought about the privatisation. I pointed out the contradictions: that the state has spent billions of pounds of public money to subsidise the bargain basement sell-off; that the pension fund was nationalised to sweeten the deal; that the loss-making Post Office was decoupled from its more successful partner and retained in public hands; that pricing restrictions were lifted in anticipation of privatisation, allowing the company to increase its profits.
None of this has got anything to do with the free market. This is direct government intervention to create a rigged market. If the price restrictions had been lifted ten years ago, the entire argument for privatisation would have disappeared overnight.
My neighbour said that governments shouldn’t be involved in the business of running companies. He said that privatisation would allow the company access to future investment. He said that previous privatisations had been a great success, and cited British Telecom and British Airways as examples. He said that taxpayers were fed up with subsidising the Royal Mail.
The argument went on for a while. Every time I was about to get in my car he’d say something that I had to contradict. I finally lost patience and drove away when he talked about the investors who were going to help the company become a big success: ‘They are wealth creators. They build the factories so that we can have jobs.’
You hear that phrase ‘wealth creators’ a lot. It is a commonly used justification for the privatisation agenda, the idea that these individuals generate wealth by their investment. They are the ‘wealth creators’, and we are the beneficiaries of that wealth. It’s a form of magical thinking, like the pharaohs believing that their rituals were responsible for the flooding of the Nile, a post hoc fallacy: because they have invested in the company and increased their wealth, their investment somehow ‘created’ the wealth. The actual wealth creation, the work that my colleagues and I do, in this version of reality, is an accidental by-product of the process, a privilege I am allowed by the goodwill of these magically endowed individuals.
Moya Greene, the chief executive of Royal Mail, has already told us to expect job losses. Very soon I expect to be begging for the privilege of working longer hours for less money.
In the last year our delivery office has moved from working on bikes to working in vans.
There are two of us to a van, doing two rounds between us. We’ve also been given new trolleys so we can carry more weight, new bags to fit onto the new trolleys, and new tracking devices to show customers exactly where their post is. They also, coincidentally, show the Royal Mail exactly where its employees are.
We’ve been given new tools in the office too: a wheeled basket each, like an oversized shopping trolley (called a ‘mini-york’), for moving our bags about, and a new storage and shelving unit for keeping our equipment in.
Our rounds have been extensively restructured to take account of the new working methods. For the past year a union rep, a manager and a planner have been huddled together in a room working out every detail of every round: how long it takes to open every gate, to walk up every path, to deliver every letter.
Everything about the Royal Mail operation is being changed. There are very expensive new walk-sequencing machines in most offices, for sorting the post into the order in which it will be delivered, new regional mail centres, where the post is gathered together and then sifted and sorted for delivery to local offices, and new lorries for shifting it around the country. Meanwhile hundreds of local offices have been closed and consolidated into larger units serving several towns at a time.
So far the Royal Mail has invested £2.1 billion in its modernisation programme, buying around 36,000 new tracking devices, 30,000 new trolleys and 11,500 new vans, and building new mail centres around the country.
All of this is being done at public expense in advance of privatisation. When the Royal Mail is floated later this year, it is expected to fetch up to £3 billion.
With Christmas approaching, the Royal Mail is taking on 18,000 temporary staff to help cover the extra work. This happens every year. This year, though, all job enquires are being directed to a company called Angard Staffing Solutions Ltd, a wholly owned subsidiary of the Royal Mail. It doesn’t just handle temporary staff over Christmas. There appears to be no way to get a job as a postal worker these days except by going through Angard.
The normal contract is for 38 weeks (less for the temporary Christmas workers). Staff are employed by Angard but seconded to the Royal Mail. They are required to do any work that their Royal Mail manager requests, though they are officially supervised by an Angard manager. They are not guaranteed any regular hours, and have no fixed place of work (though they will not be required to work outside the UK). They will not be paid for hours they do not work. For this they will be paid the minimum wage: £6.08 an hour (£4.98 if you’re under 21).
In other words, they will do exactly the same job as a Royal Mail employee, but for £2.78 an hour less. They could be sitting around waiting for a telephone call for days on end, to get only a few hours work a week. They can be moved from site to site and job to job at will. If they turn a job down, for any reason, they can be dismissed. Night workers are paid 50p extra an hour.
On 1 October the EU Agency Workers Regulations came into force in the UK. These give agency workers the same rights as permanent employees after 12 weeks. However, by employing the agency workers directly through a subsidiary, the Royal Mail appears to be able to side-step the regulations. The guidance for employers from the government says:
Those who are likely to be outside the scope of the regulations include… individuals working for in-house temporary staffing banks where a company employs its temporary workers directly (and they only work for that same business or service).
All other agency workers have had their contracts cancelled and replaced by Angard contracts. In many cases workers have had to wait weeks to be paid. One Angard worker told me it took over a month for him to get his first pay cheque. He said that the management are virtually impossible to get hold of and that if you ask them a question they fob you off. On several occasions he was given shifts which were cancelled when he turned up for work. The excuse? They were double-booked.
The Royal Mail denies it’s trying to get round the regulations. ‘The company is fully compliant with UK employment law,’ it says, ‘and any suggestion that Angard Staffing Solutions has been set up to, in some way, get round the new Agency Workers Regulations is nonsense.’
Still, Angard staff are not covered by agreements made with the union, and although they have the right to statutory holiday and sick pay, their conditions of employment are, by definition, less secure than their permanent colleagues’. It seems certain that only compliant employees will be kept on for more than 38 weeks. With unemployment on the rise, and jobs ever more scarce, is this the future of work in the UK?
There used to be a vicious old Boxer dog on my round. He lived at the end of a long drive with a gate. There was a post box outside where I used to leave the mail. Occasionally the owners forgot to close the gate and left the dog out. It would spot me as I was parking my bike, and begin padding in my direction, head down, growling, until it got close enough to launch itself at me.
There’s not much you can do at this point. I’d have my post bag at the ready to swing at the dog’s head. One smack in the jaw was usually enough. I’d complain to my manager, who would contact the owners, who would agree to keep the dog under control, which was fine until the next time it happened. There was a warning about the dog in the office, but that didn’t stop the owners forgetting to close the gate.
Dog attacks on postal workers increase significantly during the summer. Children, off school, run in and out of the house, leaving the door open. The Communications Workers Union estimates that there are around 5000 dog attacks on postal workers every year. Sometimes it’s little more than a nip or a scrape, but Keith Davies nearly lost an arm when he was attacked by two Rottweilers in Trumpington in 2008. The owner couldn’t be prosecuted because the attack took place on a private road. Most attacks on postal workers take place on private property as we have to enter people’s property to deliver the mail. The CWU launched a campaign in 2008 to change the law, but so far it hasn’t been successful.
Some dogs lie in wait behind the door to grab the mail as it comes through the letter box. Postal workers have lost fingers this way. A few months ago we were issued with a tool to deal with this problem. It’s like a child’s ruler, about six inches long and one inch across, made of red plastic, with a slot in the end. You put the letters in the slot, then shove the thing through the letter box.
The Royal Mail has been promoting it heavily for the past few weeks. Hardly a day goes by when we’re not called to the front of the office and given a warning about dogs behind doors and offered one of these tools. I’ve yet to see a single postie accept one. They’re clumsy and awkward to use. It takes a certain amount of concentrated manoeuvring to fit the letters into the slot, and then to wrangle the whole lot through the letter box. It is only really of any use if you happen to know there’s a dog on the other side of the door. But then, if you know there’s a dog on the other side of the door, there’s a much simpler solution: don’t stick your fingers through the letter box in the first place.
Last week all the new walk-sequencing machines in our area broke down. This meant that only about a third of the letters arrived at our delivery office on Wednesday. So on Thursday we had two days’ post to deliver, and everyone’s mail was late.
It’s been a bad few weeks at our delivery office. First of all Vince Cable announced that the Royal Mail was going to be privatised. Then, at one of our weekly ‘Work Time Listening and Learning’ meetings, the line manager announced that our delivery office is going to close.
The usual excuse that is reeled out every time anyone brings up the idea of privatisation is the huge £10 billion pension deficit which the company has run up in the last 20 years or so. But no private sector company will take this on. So in order to create an incentive to the private sector, the government will have to agree to fund it. Whether the Royal Mail is in the public sector or the private sector, the pensions deficit will remain a public liability.