The modern face of Royal Mail
So the Royal Mail strike is on. It has been booked to continue for only two days but the fallout will last for the next few weeks. The Royal Mail system will not suddenly right itself after two days of inactivity. Letters, people, vans and parcels will not magically materialise at the depot where they are supposed to be.
The most recent talks between the CWU and Royal Mail management did not produce the last minute miracle that many expected – and there’s a very good reason for that. It appears that there were three people who were determined to block the deal – Lord Darth Mandelson, Adam Crozier and Mark Higson. Adam Crozier is Royal Mail’s Chief Executive, Mark Higson is the Managing Director . Lord Mandelson is taking a short break from building his Death Star and is currently First Secretary of State, Secretary of State for Business Innovation and Skills, President of the Board of Trade and Lord President of the Council. Gordon Brown is Sooty to Mandelson’s Harry Corbett. That’s how much “force” Mandelson has.
So why the rumours of these Three Amigos blocking negotiations, motivating Royal Mail management to be provocative and effectively encouraging the strike?
It’s all to do with two conflicting factors: the value of the Royal Mail – estimated at about £10 billion and the “special relationship” between the CWU and the Labour Government.
Mandelson has always been keen to broker a deal which would enable Royal Mail to “downsize” and so rid the government of a substantial slice of a struggling business. The Dutch company TNT recently put an offer of £3 billion on the table for about one-third of the business. Unfortunately, Mandelson could not get his way because he could not muster the Ministerial support for the sale.
Any sale would have inevitably resulted in substantial job losses which gave the CWU a major problem. That in turn, gave Mandelson an even bigger problem because the CWU “sponsors” quite a few Labour Ministers. There was no way that he would gain support from Ministers who are effectively on the CWU payroll.
Mandelson was never going to obtain Ministerial support because had Ministers supported him, they would have been shooting themselves in the financial foot because the golden goose that is the CWU may have stopped producing those golden eggs. Inevitably, the constant but ugly spectre of parliamentary self-interest won-out yet again.
The problem of selling Royal Mail had to be dealt in such a way as to exclude government and the Ministers. Mandelson also knew that there were Brownie points on offer if the value of the company were to be further eroded. The company’s value had already taken a “hit” because of the decrease in letter volumes cause by the increased use of email. That had affected the company’s value very substantially and a strike would erode the value even further. So how does one go about goading the CWU and its members to strike?
Easy! A modernisation programme which carries with it the threat of substantial job losses – the CWU would then have no alternative but to call a strike. Little did the CWU know that Mandelson , Crozier and Higson had painted them into a corner.
TNT is still waiting in the wings – the only difference being that they will now be paying less for their slice of Royal Mail.
The major decrease in Royal Mail’s value has been as a result of of revenue loss through customers’ increasing reliance on the Internet, i.e letters. TNT specialises in PARCELS so any decrease in letter-postage will not bother them but the increasing Internet shopping volumes are just what they need . They cannot lose.
It is in the government’s interest to encourage as many strikes as possible. There will be litigation by clients for loss of business, there will be a loss of confidence, many businesses will sign contracts with other carriers (such as TNT) and then the government will claim justification for selling-off the less profitable and more troublesome bits of the company.
The government (or the taxpayer) will be left holding the less profitable sections of Royal Mail and many more thousands of jobs will be lost. Paradoxically, if the CWU wanted to out-think Lord Mandelson, they would NOT be striking and instead they would be encouraging their members to work free overtime and embrace Crozier’s ideas.
Recently, the Dark Lord has said that a Royal Mail strike would be “suicide”.
This has been more of an assisted suicide.
Royal Mail is doomed to privatisation – no matter which Party is in power. Ken Clarke has already said that he is in favour of privatisation. Peter Mandelson, Ken Clarke and George Osborne all attended the last Bilderberg meeting. In fact, Ken attends every year. Just thought that I’d mention it.
A thought about banker bonuses and yet another conflict of interests for the Exchequer. The generally accepted figure for the bankers’ and City slickers’ bonus “pot” this year is of the order of £6 billion. Assuming that many of these people are paying Income Tax at 50%, it does not take an Einstein to calculate why the government appears to have a schizophrenic attitude. Nearly half of the bonuses will come back to the Exchequer as income tax. Gordon Brown’s and Alistair Darling’s protestations about bankers’ bonuses appear to be no more than feeble attempts at playing to the gallery. The gallery that they created in the first place. It was designed to take our eyes off the poor state of the economy and to redirect our bile at the bankers. In reality, they (the government) have absolutely no intention of curbing bankers’ pay. The lessons of 2007/2008 have not been learned and rather worryingly – it’s business as usual.
Goldman Sachs has set-aside $22 billion for 2009 salary and bonus payments. You may be surprised to know what a “special case” this bank is and how it can be argued that it exerts even more power than the White House itself. READ THIS.
The Post Office is still operating well within the leafy lanes of Sussex. Today’s delivery was not-only early but, instead of a surly red-rubber-band-twanging postie, we have been treated to a delivery by a beautifully groomed blonde lady with bright-red fingernails and a smile. Long may the strike continue. Perhaps we have all been a little rash in our condemnation of that nice Lord Mandelson.
Yesterday, during PMQs, Gordon Brown told Nick Clegg that he did not agree with Mervyn King’s assessment that Retail Banking and Investment Banking should be run as separate businesses. (Well, he didn’t actually SAY that he disagreed but that is the nearest interpretation of his words). Brown feels that legislation, regulation and indecision should be the three pillars of banking control. We should not be surprised at Brown’s over-simplistic view. Reorganisation and management have been the two aspects of his tenure at No 10 which have continued to be the missing constants. As David Cameron hinted yesterday, Gordon Brown cannot make up his mind whther or not to sit on the fence but only after there has been an enquiry to decide whether or not the fence ought to be built in the first place.
Gordon Brown has been Prime Minister since 27th June 2007. It seems longer.