Private Island: Why Britian Now Belongs to Someone Else (7 page)

‘If a postman says to me, “Don't tell me about falling mail volumes, I'm carrying more than ever,” a lot of the time he'll be correct,' Simpson said. ‘But the round is designed to take three and a half hours, with the last letter delivered at the end of the round, not the way it would have been five or ten years ago, an hour after the round started. I think most postmen are working harder and being paid the same … They've been used to working 80 per cent of their time, but now they're working 100 per cent.' Working 100 per cent, as those who have tried it know, involves shooting for 90 per cent and ending up with 110. The more precisely Royal Mail management tries to make the mailbag fit the time and distance allotted, the more likely it is that some
postmen will be pressured into carrying too much too far. Times are tougher for Britain's postmen. But in the opinion of Royal Mail's competitors, not tough enough.

Pre-privatisation, a typical Royal Mail postman outside London earned about £375 before tax – just shy of £20,000 a year – for a forty-hour week, with diminishing prospects for overtime. ‘That's a lot of money in current terms,' said Guy Buswell, the chief executive of UK Mail, Royal Mail's only big British-based competitor. ‘My drivers who deliver parcels have to struggle to get £300 in their pay packets before tax and they work a lot longer hours than postmen do.' Denise Goldfinch was not only better paid than the private postmen of Sandd and Selekt in the Netherlands: she got five weeks a year paid holiday for long service. She got a uniform and service footwear provided free. In the savage ice and snow of 2010–11, she was given spikes for her shoes. When she retires, it will be with a decent pension.

But it is the Dutch model that competition is pushing the Royal Mail towards. The real battle for postal workers and their sympathisers is not so much to save the jobs that are doomed to fade away (‘60,000 people since 2002 is nothing!' Buswell snorted when I mentioned how far Royal Mail had already slimmed down), as to prevent the degradation of the jobs that remain: to prevent the job of postman from becoming something like a child's paper round. ‘In real terms, now, “postman” should be a part-time job,' Buswell said. ‘If you look at the cost of sorting by hand it's about 2p a letter; by machine, it's 0.1p a letter. Unfortunately that's the way it's going to go. The actual job the postman does in the near future is just delivering. They will deliver for four or five hours and that's done.'

I got a pretty clear line when I phoned Muck, but I had to call my contacts on the island several times while lambs and grandchildren were dealt with. Muck only gets mail four times a week, and I wondered if they minded. ‘It seems very reasonable,' said
Lawrence MacEwen, whose family owns the island. ‘I would even be quite happy if we had less. About three times a week is probably plenty.'

According to law, the Royal Mail must empty each of Britain's 115,000 postboxes and deliver any letter to any of Britain's 28 million addresses, six days a week, at the same, affordable price, wherever the letter is posted and wherever it's going. The rule's the same for parcels, except with them it's only five days a week. This is the universal service obligation, the USO – ‘part of our economic and social glue', as Richard Hooper put it in the reports that framed the debate over Royal Mail privatisation.

There have always been a few exceptions. Muck, a Scottish island two and a half miles long to the south of Skye, is one. There are twelve households on Muck and they get mail when and if the ferry arrives from Mallaig. ‘Obviously we are very expensive to the Royal Mail to deliver to,' MacEwen said. Bad weather can cut the ferries down to one a week in winter. There have also been times when the MacEwens put a first-class letter on the early ferry and it reached London the next morning. But Muck now has a satellite dish for broadband Internet. You can even catch a mobile signal in some parts of the island. ‘Nowadays email's so important for communication that the post is getting less and less important,' MacEwen said. ‘I'm afraid the Royal Mail's in a losing battle.'

If the battle is about keeping the USO – and that is the way Hooper put it – it is underway. At the other end of the British archipelago from Muck, the postal service on Jersey, where Anthony Trollope carried out the first trials of pillar boxes in 1852, announced in 2011 that it was abandoning Saturday deliveries in an attempt to staunch the flow of red on its balance sheet. Five days a week is the current Europe-wide minimum for the USO, according to the most recent postal directive from Brussels. But the then TNT lobbied hard to get that minimum reduced. In 2010 Pieter Kunz, then head of TNT's European mail operations, described the USO as ‘a kind of Jurassic Park,
and we should get rid of it.' It is easy to imagine, a few years from now, the right-wing British media blaming Eurocrats for cutting the number of weekly deliveries – ‘BRUSSELS SOUNDS LAST POST FOR DAILY MAIL' – and the private Royal Mail, with quiet relief, following the Dutch lead. ‘If TNT has its way, five days would be reduced to three,' said John Baldwin, the CWU's head of international affairs. ‘TNT is the bogeyman of the postal industry but they are not alone. Royal Mail, frankly, isn't going to argue if it's going to be released from the five-day obligation.'

Richard Hooper's first report recommending part-privatisation of the Royal Mail was produced for Labour in 2008; the second, endorsing a sale or flotation, for the Con-Dem coalition in 2010. Both said modernisation and privatisation were essential to stop Royal Mail going bust and to save the USO. Hooper One was unequivocal: ‘Now is
not
the time to reduce the universal service. Reducing the number of deliveries each week … would be in no one's best interests.' Hooper Two was less sure. There was no case for cutting the service, it said, until the Royal Mail was fully modernised. But then, cutting it ‘might be justified'. In both reports, Hooper expended much ink and anguish over the highly technical rules that force Royal Mail to deliver the bulk mail its competitors sort at a certain price: a price, Royal Mail says, that obliges it to deliver at a loss.

Hooper is right in that Royal Mail is in a fight for survival with new media, the world of words not written on paper, weightless electronic words. As with music and newspapers, so with letters. It is in a fight with competitors who get guaranteed access to its reservoir of postmen as if they were a water or gas supply. But it is also the subject of a third kind of competition, between two utterly different sets of customers with incompatible needs. A few hundred giant firms and organisations that want to send bursts of millions of letters and catalogues every few days are competing for the same set of postal workers with millions of people who want to send a few Christmas cards and once in a while something that needs a signature. In this competition the
power lies with the few, whose priority is cheapness, rather than the many, whose priority is regularity and universality; cheapness wins, and it is the postal workers who suffer.

There's a strange blip between the two Hooper reports. Hooper One is full of laudatory references to the old Dutch and German postal monopolies, TNT and Deutsche Post DHL, which privatised, then modernised, then became free-market champions. There's a chart showing Royal Mail bottom of the class in Europe in terms of profit in 2007, with TNT and Deutsche Post leading the pack, raking in the euros. Two years later, Hooper Two was strangely quiet about the German and Dutch mail stars. No wonder: the equivalent chart for 2009 shows that TNT and Deutsche Post averaged profit margins of only 3.25 per cent, less than Royal Mail.

The bitter postal rumble between the Netherlands and Germany in the late noughties may have had nothing to do with these figures, but it looked like the symptom of something rotten. When I say bitter, I mean bitter. TNT's Almast Diedrich was courteous in the face of my impertinent questions about the company's activities in Britain, but when I asked about one particular German attempt to block TNT's expansion east, his mouth twisted into something almost like a snarl. ‘What Deutsche Post did was very clever,' he said between his teeth, ‘and typically German.' What the Germans did was not so different from what the Dutch did: they tried to protect their decently paid former state postmen from low-wage competition in their home country, while setting up networks of low-wage private postmen to undermine the former state post in the country next door. At one point, Diedrich said, TNT managers called the offices of the German postal union, noted their principled stance in defence of well-paid Deutsche Post mailmen in Germany, and asked when they were going to take a similar stand in defence of appallingly paid Deutsche Post mailmen in Holland.

‘It's very interesting that the Germans compete with the Dutch in Holland not on product, not on the number of days they
deliver: they compete solely on wages,' the CWU's Baldwin said. ‘And in Germany, the Dutch compete with the Germans solely on wages. And both of them cry like stuck pigs about the other.'

Why, I asked Baldwin, did multinational companies find it so easy to move across European borders, but unions seemed only capable of acting nationally? Why hadn't the postal unions across Europe mounted multinational protests against the casualisation of the post?

‘It's partly because everything happened piece by piece,' he said. ‘Every country is suffering a loss of postal workers' jobs, partly due to the financial crisis, partly due to e-substitution, partly due to increased automation. Almost all of these countries are managing their reductions by early retirement, voluntary redundancy, redeployment, so the actual impact on any given day just is not the same. To convince ordinary postal workers that they need to take part in a European strike to protect postal services across Europe would be incredibly difficult. Unless they're hit in their own pocket, today, your average worker … doesn't go to work to worry about the future of the postal services in twenty or thirty years' time.'

While I was in the Netherlands, the Dutch parliament's pressure on the low-wage postal companies, which had been building for years, finally forced them to make a deal. In the small hours of the morning they agreed with the unions that by the end of September 2013, 80 per cent of all postal workers in companies like Sandd must be on proper contracts, meaning they gain some degree of social protection. One of the companies was Netwerk VSP, TNT's low-wage postal subsidiary. Almast Diedrich was the highest-ranking executive prepared to talk to me; the most senior bosses were preparing for the final stage of TNT's break-up, which was stripping the former Dutch post office of the racier acquisitions it made when it was the darling of the markets. I met him in TNT's headquarters on Prinses Beatrixlaan in the Hague, which with its aspirational office blocks, multi-lane highway and elevated tramway has a sort of
Pacific Rim vibe. I asked him about the deal with the unions, and he fessed up. ‘Yes, we underpaid, if you want to call it that, in the same way that others did. From early on we said when others agree to come to a labour agreement we will follow. We would not take the lead.'

On the other side of the road, in the lobby of a luxury hotel, I met Egon Groen, one of the union leaders who put his signature to the deal with employers. It was late Friday afternoon and a group of young salarymen were ordering a round of what Joseph O'Neill called ‘the gold-and-white gadgets that are Dutch glasses of beer'. Groen stood out with his hoodie and his exhaustion.

‘The TNT strategy was “We want to be one of the big players, like FedEx or UPS,” and it failed, of course,' he said. ‘If you have to split up it means it didn't work. In the end the shareholders were not benefiting and nor were the employees. So there were just a few managers who had a nice adventure and it didn't work out.' The winners from Holland's liberalisation of the postal market, he said, were the big organisations who bulk mailed. ‘The losers? Almost everybody else. TNT, the new postal companies, the workers, the government. They liberalised the market and they've had a headache for five years and it's not over yet.'

TNT did experience a postal strike in 2010, after workers balked at union leaders' negotiation of a 15 per cent pay cut. But Groen had no illusions about the way things were going for paper mail. ‘Postal volumes are going down much faster than expected. Substitution by email is going up much faster than expected. We had to fill in our tax forms by today so I guess everyone's doing it on the Internet.' Yet Groen is optimistic about the future for the luggers, the heavers, the hefters and the trudgers of society. ‘About a third of the workforce is going to retire in ten years. That will be a huge problem which will give people like the private postmen you met more chances. Employers won't be able to be so choosy. We can't import two million people from Ireland or anywhere else. The price of labour will go up.'