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Who runs Royal Mail?

• Robert Peston
• 6 Jun 07, 07:50 AM

If Life on Mars were about 1970s industrial relations, the current dispute between Royal Mail and its workforce could be an episode.

There is the odd 2007 twist – such as a workforce taking umbrage that it’s being offered a 2.5 per cent pay rise when the chief executive is pocketing a bonus reported to be £370,000 and total remuneration of around £1m (that’s what has really annoyed the postmen I’ve met recently).

But it’s mostly a trip back in time to an era of struggles between managers and unions over who really ran the place.

Both the company and the postal workers’ trade union, the CWU, appear convinced that the result of a ballot of 127,000 postal workers – to be announced at 11.45am on Thursday – will show a clear majority in favour of strike action.

If so, a strike is probably inevitable at some point within the permissible 21 days. Why? Because of the breadth and depth of the CWU’s concerns, which will be hard for management to allay.

Royal Mail’s directors believe that future success rests on pushing through as yet unpublished plans to improve productivity. They want to change working practices so that they can make the most of new automated sorting kit that they want to buy – which would allow them to reduce headcount. Directors hope that most of the necessary job reductions, which would run to many tens of thousands, could be achieved by natural wastage and voluntary redundancies.

But the CWU wants none of it. Its hope is that such reconstruction of the business could be made superfluous, if all that dreadful competition introduced into the postal market could be rolled back.

Billy Hayes, the CWU general secretary, says in a blog that he thinks ministers see the need to rein in market forces – and that all they need is an extra nudge from the threat of a strike to make it happen.

Hmmm. That’s not what ministers and senior officials tell me. The soon-to-be prime minister, Gordon Brown, would rather put on a frock and become a surprise cross-dressing guest in the Big Brother house than concede that competition is a bad thing.

The weird truth is that Royal Mail’s executives concur that competition has been introduced in an unfair way. They hate that they are forced to subsidise commercial rivals who are creaming off the most profitable business of delivering mail in bulk for commercial customers.

But there is no chance right now of an entente between management and workforce, even though it might be rational for them to jointly lobby the regulator Postcomm to tilt the playing field a little bit in Royal Mail’s favour.

In classic 1970s style this has become a battle about who runs Royal Mail – a trade union with unusual power in a workplace or a management intent on modernising a business. The stakes are too high for a quick and painless resolution.

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