The new offer reportedly includes protection for employee benefits and pensions, and commitments to retain Royal Mail’s name, brand, UK headquarters and UK tax residence.
But many of the company’s 150,000 employees have lost confidence in management, Ward said.
“We welcome some of the commitments that have been made, but the reality is that postal workers in the UK have lost all confidence in Royal Mail’s senior management and the service has been deliberately wound down,” he said.
At a conference last month, the CWU passed an “emergency motion” pledging to oppose franchising, outsourcing and cuts to services “in the event of a possible takeover”.
But the new takeover could well jeopardize these guarantees, warned Johnbosco Nwogbo, chief campaigner at We Own It.
“I don’t think there’s any certainty that the new company that takes over won’t do these things,” he told the Big Issue.
“This acquisition is driven by the desire for profit. So how can they say those things are off the table? This takeover takes place almost in the middle of the night, because everyone is thinking about the elections.”
We Own It called for the deal to be blocked until after the general election. They want the government to renationalize the service.
“We should not allow such valuable public assets to be used as private equity firms’ playthings,” he said.
When was the Royal Mail privatised?
The Royal Mail was founded in 1516 by Henry VIII. Initially intended to manage royal communications, it eventually grew into a national postal service.
For most of the next five centuries the service was administered by the crown, and then by the state.
That all changed in 2011, when the Conservative-Liberal Democratic coalition privatized 90% of the company with the Postal Services Act.
Big Issue is demanding an end to poverty in this general election. Will you sign our open letter to party leaders?
Two years later, the government floated 60% of its Royal Mail shares on the stock exchange – a move opposed by 96% of Royal Mail staff. The government subsequently sold its remaining shares in October 2015.
Royal Mail is currently part of International Distributions Services, which also includes General Logistics Systems and Parcelforce. Křetínský already owns a 27.5% share.
“The privatization of the service was intended to solve a major problem: people sending far fewer letters,” Nwogbo said. “The idea was to bring in a whole bunch of technology and new techniques to make it profitable while continuing to provide a universal service.”
However, due to long-term pressure from shareholders – who want to earn more for their investments – the quality of service has declined. Delivery offices and capacity have been cut, while prices are rising.
The cost of a first-class stamp has increased by almost 50% in just five years.
“The Royal Mail must keep Britain connected. The profit motive is far removed from that principle because there is an incentive to reduce costs and reduce services so that shareholders can continue to benefit,” he said.
“Profits from Royal Mail – just like from sending parcels – should go back to Royal Mail to make up for losses from deliveries to more remote parts of the country.”
In 2021, investors received £400 million in dividends. And even though the company made a half-year loss of £319 million in 2023, shareholders of parent company IDS have been promised a “modest” dividend.
Regulator Ofcom recently warned that the Post could become “financially and operationally unsustainable in the long term” unless it is allowed to stop delivering letters six days a week (the ‘Universal Service Obligation’).
Both the Tories and Labor have provisionally rejected this suggestion. But it could become a reality under increasing pressure from shareholders, Nwgobo said.
“The motivation is not to improve the service, but to make a profit. The gains come from labor maneuvers and could soon come from lowering universal service obligations,” he added.
We Own It wants the government to block the sale of the Royal Mail and bring it back into public ownership.
It is a gamble, with none of the major parties showing interest in the policy. But the public demand is there, Nwgobo points out, with 68% of people supporting renationalization.
“We don’t give up. The government has turned around many other things,” he said. “We will mobilize people to make that demand – that Royal Mail should be publicly owned and fulfill the purpose for which it was established. That keeps us connected and does not enrich the shareholders.”