When Royal Mail was privatized in 2013, then business secretary Sir Vince Cable said the move would “ensure a healthy future for the company”.
A decade later, the group is on the brink of collapse. Long-running talks between Royal Mail and the Communication Workers Union (CWU) are now at a critical stage, with the next 24 to 48 hours seen as key to resolving the dispute.
If there is no progress, Royal Mail bosses in the parent group International Distribution Services They have threatened to disconnect the postal service and put it under some form of administration.
Such a move would be politically explosive and leave Royal Mail in uncharted territory. Suffice it to say that the Government would be called upon to ensure that some form of service is maintained.
Rishi Sunak will not want the demise of a postal service, whose legacy dates back to 1516, when it was created by Henry VIII, to occur during his watch. This can be seen as a negotiation tactic on the part of the bosses. But sources insist they are not lying.
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They have already renamed the parent company International Distributions Services and threatened to dissolve it, separating the loss-making British arm Royal Mail and the profitable European logistics arm GLS.
The company has been rocked by 18 days of strike action since August last year, costing it £200m so far.
Particularly damaging were the Christmas strikes that left piles of cars and gifts undelivered. This at a time when the price of stamps is increasing considerably. The cost of a first-class stamp will rise above £1 for the first time next week, rising from 95p to £1.15 on Monday, while a second-class stamp will rise to 75p.
Talks to resolve the strikes have been ongoing since late last year and there are signs there may be some movement on pay. But the dispute goes beyond salaries.
Royal Mail wants to make changes to the way postal staff do their jobs, including changes to clocking times and sick pay. The unions continue to resist and new strikes are a real possibility.
The threat of strikes at Royal Mail is nothing new, of course. The CWU threatened to withdraw at the time of privatization a decade ago, when company shares were sold to investors for 330 pence each.
Strikes were averted and the Government’s sale of Royal Mail into private hands allowed employees to receive 10 per cent of the shares.
The stock topped 600p in 2018. Posties who cashed in almost doubled their money. But those who held on have lost out.
The slow death of postal mail has hit the letter business hard, while Parcelforce’s most successful arm faces increasingly tough competition from the likes of Evri, DHL, DPD and Yodel.
Thousands of striking Royal Mail workers and supporters attend a demonstration organized by the CWU in Parliament Square on December 9 last year.
And there has been turmoil at the top. Former chief executive Rico Back stepped down in 2020 after just two years, replaced by Keith Williams, a former British Airways chief executive famous for settling a bitter industrial dispute at the airline a decade earlier.
So far he has failed to emulate his undergraduate successes. And its new chief executive, Simon Thompson, has not been without controversy.
Earlier this month, MPs accused him of “an unacceptable level of incompetence or an unacceptable level of misdirection” over the company he runs.
Ten years after privatization – and more than 500 years after its creation by Henry VIII – the future of Royal Mail has rarely looked so threatened.