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The new offer reportedly includes safeguards for employee benefits and pensions, as well as commitments to uphold Royal Mail’s name, brand, UK headquarters, and UK tax residency.
However, many of the company’s 150,000 employees have lost confidence in management, Ward noted.
“We appreciate some of the commitments made, but the truth is postal workers nationwide have lost trust in Royal Mail’s senior management, and the service has been deliberately compromised,” he stated.
At a recent conference, the CWU passed an “urgent motion,” vowing to resist franchising, outsourcing, and service reductions “in the event of any takeover.”
But the proposed takeover could jeopardize those assurances, cautioned Johnbosco Nwogbo, campaign manager at We Own It.
“There hasn’t been any certainty that the new acquiring company won’t pursue these actions,” he informed the Big Issue.
“This acquisition is driven by profit motives. So how can they claim these actions are off the table? This check is almost like closing time at the bar, with everyone thinking about the election.”
We Own It has called for the deal to be halted until after the general election, advocating for the government to re-nationalize the service.
“We must not allow such valuable public assets to become toys for private equity firms,” he emphasized.
When was the Royal Mail privatized?
Founded in 1516 by Henry VIII, the Royal Mail initially managed royal communications before expanding into a national postal service.
For centuries, the service was under royal or state control until 2011, when the Conservative-Liberal Democrat coalition privatized 90% of the company with the Postal Services Act.
Two years later, the government floated 60% of Royal Mail shares on the stock market, a move opposed by 96% of Royal Mail staff. The government then sold its remaining shares in October 2015.
Currently, Royal Mail is part of International Delivery Services, along with General Logistics Systems and Parcelforce. Křetínský already holds a 27.5% stake.
“Privatizing the service aimed to address declining letter volumes,” Nwogbo explained. “It was meant to introduce new technologies and methods to make it profitable while maintaining a universal service offering.”
However, shareholder pressure for higher returns has led to a decline in service quality, with cuts to delivery offices and capacity, along with rising prices.
The cost of a First Class stamp has increased by nearly 50% in five years.
“Royal Mail is meant to keep Britain connected. However, the profit motive undermines this principle, as there’s an incentive to cut costs and services for shareholder benefit,” he remarked.
“Income from Royal Mail, such as parcel delivery, should be reinvested to offset losses from delivering to remote areas.”
In 2021, investors received £400m in dividends, despite the company reporting a £319m half-year loss in 2023. Shareholders in parent company IDS have been promised a “modest” dividend.
Regulator Ofcom has cautioned that the Mail could become “financially and operationally unsustainable in the long term” unless it’s allowed to reduce letter deliveries to five days a week (‘Universal Service Obligation’).
Both the Conservatives and Labour have rejected the idea for now, but under shareholder pressure, it could become a reality, Nwgobo suggested.
“The motivation isn’t service improvement but profit. Gains come from labor maneuvers and may soon stem from reduced universal service obligations,” he added.
We Own It insists on the government blocking the Royal Mail sale and returning it to public ownership.
While it’s a remote possibility, with no major party expressing interest in the policy, there’s public demand for it, Nwgobo stressed, with 68% of people supporting renationalization.
“We won’t relent. The government has turned to many other matters,” he affirmed. “We’ll mobilize people to demand that Royal Mail be publicly owned and fulfill its founding purpose of keeping us connected, not enriching shareholders.”