Postal workers have just voted to strike. According to the workers, all they feared when the formerly nationalised mail delivery service was privatised in 2013 is now coming to a head: Royal Mail is being broken up, Parcelforce hived off, jobs are being cut, promises over shorter hours are being binned and management bullying in the depots, they say, is intensifying. The CWU argues that underlying all this is a company board which has become overpaid and irresponsible, and whose only response to challenge is to squeeze what they can out of Royal Mail’s staff. They say this is the “fight of their lives.” But who are they fighting?
In 2009, a political scandal shook the UK. Leaked records showed many MPs secretly abused their expenses to enrich themselves and pay for luxuries. Across the country, the MP expenses scandal hugely undermined Parliament’s reputation. One of the most eye-catching of the shocking stories showed a former Conservative Cabinet minister including claiming the cost of having the moat cleared at his country manor house. This MP, Douglas Hogg, was the first to stand down from Parliament because of the scandal.
But Douglas Hogg was not the only top Tory enjoying the publicly funded moat — or the maintenance of the family’s Aga cooker or the £18,000 annual gardening costs or payments for the “mole man” and other expenses. Hogg shared the Lincolnshire Manor House with his wife, Baroness Sarah Hogg. According to reports of Douglas Hogg’s correspondence with the Parliamentary Fees Office, Hogg said his expenses claim was high because he had to pay for staff to maintain the Lincolnshire manor house when he and his wife were away in their London townhouse.
Like her husband, Sarah Hogg had deep connections to the Tory Party: she had been the head of Tory Prime Minister John Major’s Policy Unit in the 1990s. Sarah Hogg was credited with a key role in writing the 1992 Tory manifesto, with its pledge to privatise rail. Hogg renewed her Tory connections when George Osborne made her a director of the Treasury from 2016-7, supporting his austerity programme. Expenses scandal, John Major’s policies, rail privatisation, Osborne’s austerity — you might think Baroness Hogg’s record is all that is wrong with Britain’s political elite. But not Royal Mail Group, who in May 2019 made 73-year-old Hogg their Senior Independent Director. Hogg is one of the six “non-executive,” or part-time, directors on the Royal Mail Group’s eight-person board.
But the most significant board member is Rico Back, Royal Mail CEO, recruited to the board from one of the company’s European subsidiaries in 2018. Since then Back has stumbled from scandal to scandal. In 2018 shareholders revolted against Royal Mail’s pay plans: 70% of shareholders refused to support the company’s pay report, including Back’s own £5.8 million ‘golden hello’ and annual deal worth up to £2.7 million. It was the largest such revolt at a UK public company in at least a decade.
Even the City was shocked at the scale of Back’s pay packet, especially given his recruitment from one of the company’s own subsidiaries. But that wasn’t to be the end of the scandals. In 2018 we learned that Back intended to run Royal Mail from his £2.3 million luxury penthouse overlooking Lake Zurich in Switzerland. Back would travel 500 miles every week from his Swiss compound, frequented by Porsches and Bentleys, to wage a battle against the CWU, whose members earned an average of £28,274 per year.
The union said Back’s appointment was evidence of Royal Mail’s intended direction. It goes back to Royal Mail’s decision to buy the private Dutch courier firm founded by Back, which became Euro-delivery company General Logistics Systems (GLS). When Royal Mail promoted Back, they said he still had special “management control rights” at GLS, which he’d been given to make the subsidiary more “entrepreneurial”. That was the justification for the £6 million golden hello. In GLS’ case, more entrepreneurialism meant sky-high corporate pay mixed with allegations of 14-hour days for workers, bogus self-employment and earning as little as €3 per hour.
In fact, GLS’s record shows what “entrepreneurial” mail delivery services tend to look like. In September 2016, workers throughout northern Italy went on strike against GLS and its subsidiaries and subcontractors, protesting against low pay, poor conditions, subcontracting and precarious work. The dispute got so bad that one worker was even killed by a truck on the picket lines in Piacenza, leading to big protests. Conditions at GLS in Italy are still sparking protests. This April workers occupied the roof at one GLS depot for two weeks, in protest at sackings. The fact that these are the business practices Royal Mail sought to import with the appointment of Rico Back goes some way to explaining the current standoff.
And Back isn’t alone. Michael Findlay, another board member appointed after Rico Back became boss, also has experience running a gig economy mail firm. Findlay had a long banking career, but Royal Mail’s website emphasises his role for seven years as a director of UK Mail, one of the bigger private courier companies. Findlay helped organise the sale of UK Mail to Germany’s Deutsche Post for £243 million in 2016, with £130m going to the founding Kane family — whose leading figure Peter Kane is a major Tory donor, giving the Party some £550,000 and regularly dining with Conservative ministers.
UK Mail made its millions by squeezing their supposedly self-employed staff. Its practices included hefty fines when couriers were off sick. In one particularly notorious incident, a workers was fine nearly £800 after suffering a car accident while on duty. This was on top of the £1,800 he had lost from taking just seven sick days in a year. It was business practices like these which produced the £16 million in profit UK Mail made the year it was bought out by Deutsche Post.
Royal Mail’s recent appointments make clear that the company is heading in a very different direction from its recent publicly-owned past — and towards headlong collision with its unions. As if all the above didn’t make that clear enough, the appointments of British Airways veterans Keith Williams and Maya da Cunha hammer it home. Williams has held various top BA jobs, including Chief Executive, and became board chair this May, the same month that former BA Director of People and Legal da Cunha was appointed to the board.
The Royal Mail were quick to praise da Cunha’s “extensive dealings with trade unions” and experience in “transformation” and “employee engagement” while at BA. It didn’t mention that much of this experience had come during one of the most long-standing and bitter industrial disputes in recent history, between BA and their cabin crew. Both Williams and da Cunha were involved in that bitter fight as the airline tried to cut costs. Their new company is heading in very much the same direction.